If you plan on watching from the Poly beach get there a little early to get a chair. There are also towels from the pool and the CMs are usually there handing them out for you to sit on. If you want a Hammock get there really early. The beach will get crowded but not so bad you wont be able to find a spot. The Poly beach is a great great place to watch from. These pictures were from the 3rd of July 2005 which is the same show as the 4th.
As far as eing in the park with small kids, go to the Exposition hall and let them take a nap.