I think my biggest concern is sleeping. Does everyone sleep okay in coach? I don't want to do sleeper because of the price. We might as well fly if we are going to do sleeper.
As you might expect, everyone will have different experiences. Personally, we prefer squishing it in a sleeper to being "out in the open" of coach. The sleeper is certainly more expensive than coach, and can be more than flying depending on circumstances, so it's just a decision everyone has to make WRT how much your family values having their own vehicle (and stuff) with them, generally enjoys train rides, how much time you have to travel, and many other considerations, as to whether the cost of a sleeper is worth it. ALL THAT ASIDE (...because your question was about sleeping in coach....!

) here is my input:
Sleeping in coach is definitely do-able, but will be impacted by a number of factors, many of which will be outside of your control. Things to think about:
- Will it bother you if people are walking by you when you are trying to sleep? For us there wasn't a lot of foot-traffic at night, but there will be some, including the doors at either end of the car opening/closing which bothered my DH. The last dinner seating is at 9pm, so there will definitely be people moving around until at least 10pm when the dinner service is over. And then of course there will sometimes be people stretching their legs, visiting the restroom, etc. at any time.
- Ages of your children and how you will arrange yourselves. The seats are in pairs on either side of a center aisle, and are slightly staggered (not directly across like on an airplane). If you are an odd-numbered party on a full train, someone will be with a stranger. If your kids are small enough, it is possible to snuggle an adult with two of them in one pair of seats -- the seats are wide and have footrests and are actually reasonably comfortable. Note that I think you need to bring your own pillows and blankets in coach now. Back when we rode coach they were provided, but I think they have changed that since.
- Does your family tend to be light sleepers or sound sleepers? I tend to be a light sleeper and one of my biggest concerns in coach was someone snoring or people talking, or hearing someone else's music even though they have earbuds in. This didn't turn out to be an issue, but it could have been & there's no way to plan for this unless you bring earplugs! My kids, though, sleep like rocks and they were out-cold all night.

So, in short, we love the AT but did not love traveling in coach. [I feel like I need to write another post about all the reasons we love the AT because this one is definitely reading more negative and I don't mean to be down on the AT because for so many reasons it is great for my family!] Coach was generally fine and we all got some sleep (to varying degrees; the kids slept well, I slept OK, DH really only dozed in and out), we just prefer our "own space" of a sleeper. If that's not in the cards, for families traveling with children, I would recommend lower-level coach, if possible. There are far fewer seats down there, and the path through the cars is on the upper level, so no one should be accessing your lower-level seating area unless they are sitting there (or are curious, or get lost). We didn't realize this when we booked coach, so we were on the upper level; I don't have first-hand experience with lower-level coach, but it sounds better to me. You would have to go upstairs to get to dining and lounge cars, but otherwise the bathrooms are on the lower level (but there is a door to separate the coach seating from the general restroom area) which can be convenient if you have small children.
I hope this is helpful! Good luck deciding!