Hi Penny! Breakfast at Cinderella's Royal Table is one of my favorite meals at Walt Disney World! I think the first seating is the ideal time to have breakfast in the Magic Kingdom. If you dine an hour before the park opens, you'll finish breakfast just in time to start visiting the rides and attractions before the lines get long. The first few hours after the park opens are the best times to experience lots of attractions with little waiting -- it's definitely better to eat before the park opens so you won't miss those first few uncrowded hours in the park.
My family has dined at Cinderella's Royal Table several times; sometimes my husband and son have eaten in the Castle with us, and other times my daughter and I have had a "girls only" meal. If you think the boys in your family will enjoy Cinderella's Royal Table, don't hesitate to bring them. You'll see lots of fathers and boys dining there, and the princesses dote on the boys as much as the girls, but are also good at picking up cues from boys who don't want that attention. My own son is now 10, and the last few times I dragged him to the Castle, he acted like he was in agony for the entire meal. Since breakfast at Cinderella's Royal Table is expensive and reservations can be tough to come by, I elected not to bring the boys with us last time to save my son from the torture and to save some money.
If your daughter enjoys dressing up, make sure she brings her princess dress for her meal in the Castle. Hope you have a magical time!