MGM is a great park, but in terms of appealing to 6 and 7 year olds, I honestly can't see how anyone could possibly recommend it over Universal.
Sure it has the Muppets. But the Muppets really aren't hugely popular characters with that age group like they once were. Yes, it has Star Tours. But it's a thrill ride, which could scare kids that young (who also may not meet the height requirement of the ride). Even if they're hardcore Star Wars fans, they may not be able to enjoy the attraction and that could be frustrating. And yes, there's Fantasmic. But I'd hate to tell a 6 or 7 year old that they have to wait until nightfall to enjoy the attraction that will appeal to them.
On the other hand, Universal has attractions based on characters that are very popular right now with today's young kids, such as Shrek, Scooby Doo, and Jimmy Neutron.
In addition, right next door is Islands of Adventure, which also is much more appealing to younger kids. Not only is there Spider-Man and the Dr. Seuss characters, but it also has Jurassic Park. Even if they have never heard of the Jurassic Park movies, dinosaurs are generally very popular with kids.
I'd go with Universal!