Sheila, the Family bedroom is very nice and cozy. There is plenty of room for luggage, and if you need more room, there are racks just down the hall. The bathrooms are also on the lower level and larger than the ones in the Delux rooms on the upper level.Being on the lower level gives you quicker access to the doors at station stops if you want to get out on the platforms for a minute or two (with the permission of your car attendant!)
The only drawback we found with the Family room was the limited view out the windows. Yes, you get a window on each side of the train, but the view is limited, front to back. If you want to watch the scenery roll by, it's best to spend some time in the sightseer/lounge car.
The snacks and drinks for the sleeper car passengers are on the upper level so the kids will have fun going up and down.
We had the Family room on the Coast Starlight from LA to Seattle last summer. Our two kids were 9 and 11 then and really enjoyed it as well.
One general tip is to buy a hand held scanner from Radio Shack so you can listen to the train crew communication along the way.
Enjoy your trip!
Dave