We did deluxe dinning last year and have done regular dinning the 3 years before last. If it were me w/ young children, wanting to eat at a few character meals I'd stick with the regular dinning plan (not the quick service - which is counter service only.) Deluxe dinning is great if enjoying meals is as important to you as riding rides/visiting the parks is, otherwise regular dinning is a nice balance.With your kids as young as they are trying to do 3 table service meals a day will take away way too much park time, IMO.
W/ regular dinning I always used our snack credit for breakfast items (shared fruit bowl, yogurt, pastries) our counter service credit for lunches wherever we happened to be @ lunch and our table service credits for one sit down dinner a day.
There are several 1 table service restaurants that have characters -Chef Mickeys breakfast and dinner, 1900 Park Fare breakfast and dinner, Ohanas breakfast (Ohanas is a lot of fun for kids at dinner even w/out characters since they lead them on a parade through the restaurant on the coconut race) Cape May Cafe breakfast, Crystal Palace breakfast, lunch and dinner, Garden grill dinner, Akershus all meals, Hollywood and Vine breakfast and lunch and Tusker house breakfast and lunch.
Note, you can spend your credits however you like, so if you want to go to a fancier 2 table service place - like Cinderella's castle you can.
Likewise you can go to Hoop Dee Doo or Spirit of Aloha shows but it'll cost 2 TS to do so. So plan on paying for a meal, or sharing a counter service or 2 to 'extend' your credits. It's total credits for the whole party - so if the 6 yr. olds share a counter service lunch one day, you'll have a spare child's credit to use up later, for ex..
When you do your ADRs you'll enter a credit card no. for the shows and character meals, but will not be charged @ that time - you'll only be charged $10 pp if you fail to show up, otherwise when you get there you'll be asked if you are on the dinning plan and at the end of the meal they'll take one of the room cards and use it just like a credit card. You'll get a receipt which tells you how many adult and how many child credits you have left. At counter service places they just swipe one card at the register when you order again you'll get a receipt telling you how many you used and how many are left.