Hi, Tanya! I can tell you from experience that there really are no bad seats at the luau cove, where you will see the Spirit of Aloha dinner show. There may be a bit more interaction with the guests in the Tier 1 seating, but in terms of viewing the show, all of the seats offer great views of the action. The performers on stage are also pretty well distributed across the venue, so you will not be looking at the sides or backs of the entertainers' heads the entire time if you do not have seats front and center.
It is up to you whether or not it would be worth it for your family to pay out of pocket for the upgraded seating, but it would definitely not matter much to my family. You can find a seating chart located
HERE where you can see that there really are no seats too far from the stage. That should help you determine whether or not you would like to switch to a different tier.
I hope you enjoy the show, and have a wonderful vacation!