You can bet that most of us did face such dilemma

I did anyway!
Even as I agree your kids are fine - would be even better with one MOD that improves kids even more (I think its called "next generation")
I personally decided never breed - so I can only use the item slots -> what would give me the freedom of choice in different battles.
I also have tried each wife more times (only Mirabella once as I got the path/mod for her later on and I knew I don't want her) so I always decided what wife I want and held her till the end.
Hint: If you like rings/ regalia / belts -> go for Neoka - she is the best: also you will benefit from the elven special tactics that many players advise in this forum.
I would hold on Dwarves / dwarven girl in your place, still I mostly decide to go for zombie girl
Hint 2: would you decide to stay with the dwarven girl and have the 2 artefacts (ale + scope : bonus to archers) - get both beholders - as thei are archers, also they have great abilities, and leave the other 3 slots populated with dwarves (probably alchemists, canoneers, giants... later on you may kick our any of these five units and get green dragons... I would kick out either alchemists or lower beholders... probably lower beholders

) and this army will be sufficient till the bitter end of this game.