Brings back great memories of early backpacking trips with my boys. From my experience, at that age you would be well served to keep it on the easy and fun side...because you definitely want them to finish the trip talking about wanting to come back for more. And having "bail out" opportunities is always a good idea if something goes awry (bad blisters, e.g.).
That being said, I would recommend against any hike that starts in the Valley as it goes straight up....a tough way to start for a newbie of any age.... maybe...maybe...think about getting up into Little Yosemite Valley, set up camp and do a day trip or two and come back...but you said that wanted a loop if at all possible...
The month of May this year could be a high country possibility...maybe. Possibilities if the roads are open would include Tuolumne to Glen Aulin, which is downhill, a nice way to start the first day when the packs are at their heaviest.
Another possibility IF the roads are open would be to take one of the YARTS buses to either Glacier Point or up the Tioga Road and to start a hike there, hiking back down to your car in the valley. Tioga Road down to the top of Yosemite Falls and down to the Valley, or even from the old Quarry to Mt Watkins, then along the north side of the Valley rim...this one would give you all sorts of bail out options (down Snow Creek Trail or down Yosemite Falls trail), incredible views, and some fin kid stuff at Indian Rock, North Dome, and Yosemite Point. Another would be Glacier Point over the Panorama trail to Little Yosemite Valley. Big downhills into the Valley which can be tough on older knees but usually pretty comfortable for the kids.
As always, be safe...despite the bad winter (so far) there will be water flowing and it will be cold. And watch the mosquito reports...a bad mosquito time, whether or not prepared...can make a trip miserable. Most of all, have fun!