We were just there last July and although it was really, really hot (apparently it was unusually hot last year, even for July), we had a really great time. It was kind of like WDW in August -- almost every day we had a late afternoon thunderstorm, but they always passed quickly.
We stayed at the Holiday Inn Club Vacations Gatlinburg - Smoky Mountain Resort as an RCI exchange for our
DVC points. It was nice (not quite Disney nice, but it was clean)
Some of the things we did (DH, DS14, DD12 and me):
Wahoo zip lines (lots and lots of fun, but expensive -- $80 per person, but our hotel had a deal for a $55 discount per person so it was only $30 each)
Dixie Stampede
Cades Cove -- the traffic moved so slowly, but you might see a bear or two (we did, but oh, did that mess up the traffic even worse!)
Magiquest -- you purchase a wand and an hour of time and run around like crazy waving your wand at things and getting them to light up or move to complete quests (they have a web site). Once you buy a wand, you can return again and just pay for the time (I think it's $10 an hour). Depending on the ages of your children, they might find this a great deal of fun, my kids sure did. There is also a mini golf course (not the best one I've ever seen) and a mirror maze (we enjoyed that more than the mini golf) in the same building -- I think our original admission included both of those.
We went to the aquarium and maybe it was just that we were tired that day, but we didn't think it was that great. It went on our "did that once, probably don't need to do it again" list.
I would definitely recommend the zip lines if your kids are older (I think 5 years old was the minimum) -- there are a total of 6 ziplines on the course. They drive you up to the top of the mountain, with two guides who show you the "ropes" and off you go. There is a little bit of walking and climbing from line to line and at one point there are two lines so you can "race" another member of your party. We decided that even at $80 per person, we would do it again (and again). I don't like the sensation of falling, but after the first line, I was having too much fun to worry about it and it really didn't feel like I thought I would.