RPG diary - Playing with kids. First session

My son and daughter are 5 and 7 years old, and I've been wanting to start playing RPG's with them for some time. It gives us something to do together that's fun for all of us, and at the same time it gives me a chance to introduce them to the hobby that has meant so much to me through the years. Playing with young kids is quite different from playing with adults, and I'm going to use this blog to think out loud about how things are going, perhaps in the end reahing a good format for this kind of game.
I use the rules from Corey's game presented in the first issue of Gygax mag. It's a simple system were better skill is represented with bigger dice, and the die rolls in combat are reduced. It was designed for even younger children, so I may up the complexity somewhat. I don't have any miniatures, so we use toy figurines of roughly 1:10 scale from Schleich and Papo. We also have a cool wooden castle to go with it.
First session was a simple story where the characters set out to free the fairy princess who was being held captive in the tower of the evil sorceress Abraxas (improvised name, sorry :D ), and it ended badly with a TPK. I figured it was better to let them die on their first go because of bad decisions (they went for the frontal assault approach and did not help eachother when needed), than to have to deal with a bad gaming culture where the players are thoughtless and rash. Nobody started crying, so it went fine. So, I guess my first advice is: don't be afraid to kill off your childrens characters.
Other than that, they are very eager to contribute with their own ideas, so flexibility is important. My daughter wanted to play a unicorn who was a fighter, but had something called "world magic", and so I had to make room for that, even though the system divides sharply between fighters and magic-users. In the end, her world magic became an ability that could be charged using a strange glittering toy of some sort that her character kept in her home, and could only be used once for each charging. It could not be used offensively, but could open locked doors and the like.
One problem I had was that the children seemed to get bored while waiting their turn. I'm unsure wether to do anything about this and if so, what. It may not be such a bad thing that they are bored for short periods of time as long as they are mostly having fun. This is also something children need to learn, that nothing's fun all the time. I will be considering it.