I'll be controversial - love both Ark and WP - but given you've got really young kids - I'd actually recommend southern Flinders (agree Rawnsley Park or even Willow Springs has better bush camp feel over WP campground).
Reason being... the kids will not appreciate the geology, history and astronomy of Ark, yet. Bushwalk choices are broad in the Pound - mild to strenuous (St Mark Peak) - more choice and all no less dramatically scenic than Ark, IMHO. And ther Visitor Centre at WP is more small kid-friendly.
4WD options... I thought SkyTrek more interesting botanically/scenic than Echo Camp backtrack (though history of Ark is much richer). And campgrounds like Rawnsley are prettier - the Pound wall backdrop is spectacular - you don't get that in the Whyana creek bush camping of Ark. And forget the CP at Ark - it's a horrid dust bowl.
And from WP area - you can easily do Bunyeroo scenic drive and Brachina gorge as a (free) day drive. Or even Blinman mine tour.
Remember to take 'slime' if you're taking bikes for the kids - punctures happen within minutes of putting the bikes to ground. Slime works a treat to resist further punctures too. And for winter - double sleeping bags and beenies for the little 'uns!
