HI Amy,
If you think you want to watch Fantasmic (which I highly recommend), you are going to want to book the Fantasmic Dinner Package. The wait for the show without the voucher is anywhere from 60-90 minutes (or more), and you are not going to want to wait in that with little ones. When you have the voucher, you only need to line up 30 minutes prior to show time.
For character dining, I recommend Chef Mickey's, Crystal Palace and Donald's Safari Breakfast. If your little ones are big fans of Disney Junior, just make sure that you watch the
Disney Junior - Live on Stage show. Various characters greet children outside prior to the show.
If you are fans of Italian food, Mama Melrose is my favorite one Table Service credit meal in Hollywood Studios. All of my kids love eating there. The atmosphere is casual and the food is delicious. Hollywood & Vine is a standard buffet and nothing that exciting. However, it's a favorite for people who don't love Italian food and/or have kids who want a lot of variety.
Hope this helps! Please let me know if I can assist you further.
Wishing you a wonderful vacation,
Kaylene