Hi Daniel:
I'm going to vote for the choice that reduces the chances of having tired or cranky kids (option #1, the earlier show).
Hoop-Dee-Doo Musical Revue is a wonderful family experience. The show is entertaining, the cast is talented, the atmosphere is festive, the jokes are plentiful (and corny), and the food is finger-licking tasty. Hoop-Dee-Doo is a vaudeville-style dinner show with a country twist. Dinner is served family style and includes favorites like fried chicken, smoked bbq pork ribs, fresh corn bread, strawberry shortcake and the most delicious country-style baked beans I have ever tasted. The food and most drinks are all-you-can-consume, so you'll leave satisfied.
The reason why I don't think a category or two of seating is with the potential disruption of having your children stay up too late is because as you enjoy the food, the extraordinary Hoop-Dee-Doo cast puts on a show full of dancing, singing, and comedy. Hoop-Dee-Doo is very interactive and the cast frequently takes the show from the stage and into the audience to sing songs and engage the guests. Towards the end of the performance, a handful of lucky audience members are asked to join the show for the grand finale. So while the seating in category one is closer, you'll still be able to catch up close glimpses of the actors during the show no matter where you sit.
Enjoy your vacation.