Hi Stephanie!
Your first trip to Disney! How exciting! When I was planning my first trip it seemed like the travel day would never get here fast enough. When you get to Disney, soak it all in. You'll have so much fun it will literally fly by...
For your length of stay, a day or two to relax is a smart move. With the exception of Magic Kingdom, our family (also a family of 4) was able to get through each park (Hollywood Studios, Epcot, Animal Kingdom) in a day if we started early enough. Magic Kingdom is large, plus when you factor in shows, various parades, stopping to eat, we normally have to split Magic Kingdom up across two days. Using that logic, that would give you 2 days for Magic Kingdom, a day for the other 3, and a day for the Water Park.
But since it's your first trip, and you have the Park Hopper, it was cool starting the day at, say, Magic Kingdom, and ending the day at, say, Epcot. Some of those most do's can't wait till the next day (smile)...
Also, what we try to do is take a day or two to enjoy the resort. All the resorts have a host of amenities, and you have to somewhat enjoy what is normally the largest investment on your Disney trip (smile).
Good Luck! 8 and 6 are great ages for a first Disney trip! They'll remember if for the rest of their lives!