Wow, you folks are making me homesick! I grew up in East Tenn and I love the Sevierville area. But a word of caution. The traffic can make you want to pull your hair out and say words that you won't want your children to hear! And it is hit or miss--one day great, another a parking lot.
That said--
My favs. The Old Mill Restaurant in Pigeon Forge. It is great. There are many crafts stores within walking distance of the restaurant. I've seen many talented artisans here--glass, pottery, painting, etc. It is worth looking around if you like unique and quirky art--and it is not all hill-billy-esque garbage that as a native I find utterly offensive. There is a store with lots of doggie items that I also like--it is next to the Tennessee Cat House! There is also a huge Christmas store that looks like a small Bavarian villiage (think Germany's Epcot). It is wonderful. Gatlinburg has some very good homemade candy stores and it's worth sampling these treats. I enjoyed the aquarium, but remember thinking it was quite pricey when I went. Ripley's is cool, but might be a little too creepy for little kids.
I haven't visited for a couple of years, but can highly recommend the cabin rentals. Hubby and I do this now and it is a wonderful experience.