My little cousin Brittney (age 4), who is normally not afraid of anything, was just TERRIFIED at Disney. My parents, who took me, my brother, and sister ever since I was five and they were born, didn't understand it.
Finally, we understood that she thought the characters from every attraction (ride, movie, show) could come and get her. So I told her my grey Old Navy sweatshirt was a magic sweatshirt, and no one could see her if she was wearing it - worked like a charm. Everything we went on after that was fantastic - especially with her snuggled up to me in her sweatshirt going, "Amy, pssst! Amy see! They don't even know I'm here..."
And if your kids are anything like Britt, the more things I told her she wouldn't like because they might be scary, the more she told me, "No way, I can go on THAT. I'm NOT a baby!"
I told her Fantasmic! was all about Mickey Mouse having a bad dream, with all the mean people from all the Disney movies. She asked if they could come and get her (the bad people), and I told her that since there was a whole lake between them and us, they wouldn't even be able to see her.
Needless to say, it was her FAVORITE thing of the entire 8 day trip. Couldn't stop talking about Mickey's Bad Dream to ANYONE who would listen. Bus drivers, cab drivers, airplane attendants, AND a random man sitting next to her at the Spectromagic parade, whom she stared at for ten minutes before she said, "Um, sir, 'scuse me, but why don't you have any teeth?":lol:
Anyways, as long as they know that no one can take them/come after them, I think the kids will have a great time. Good luck and have fun!