We've done both and they are very different experiences. I would say, as an overall event, Pirates and Pals is better. When we did it, they gave us a little scavenger hunt to do when we checked in, the dessert buffet was ENORMOUS, Smee and Hook visited and then we went on the boat. Our captain played games with us, we saw the fireworks and then met Peter Pan at the end of the boat ride (the captain also gave the kids small gifts if I recall). It was a really fun, unique evening.
We just did the Star Wars party in December and it was fine. I did it mostly so my DH could get a good view of the show without waiting in a spot for too long. The party itself is kind of cramped into Star Wars Launch Bay (it's in an area near the character meet and greets). The desserts were good, but nothing spectacular. There is no seating at the party (just tables), so after awhile, people started sitting on the stairs and the floor. There are no meet and greets (though you are free to stand in line for Chewy and Kylo along with the rest of the WDW guests) though the Stormtroopers walk through very briefly and then escort you to the show area. The viewing area wasn't crowded (this was on Dec. 19, 2017, It's in the raised platform area where Mickey's Sorcerer's Hat used to be.) and DH was able to sit on a brick wall at the back of the viewing area which was nice (we sat the entire time). My only complaint is that we were quite close to the show so while we could see, the sound was REALLY loud and distorted at times. We also couldn't see one special effect at the end. The whole experience was OK, but nothing I would do again. I will say, though, with smaller children, you may have difficulty finding a spot in general viewing where they can see. Personally, if I were making this choice, I would do Pirates and Pals and then solicit some advice on best Star Wars viewing areas for smaller people without doing the party.
