Visited Montreal with my wife a few years ago and then went to F1 Montreal a couple of years later. Had a great time on both occasions. Here are my thoughts:
Montreal has an excellent transit system. Even though staying in the city center is most convient for F1, you can get out into the suburbs a bit to save on accomodations if that is important. The metro stop for Circuit Gilles Villeneuve is Jean-Drapeau on Line #4. It originates at Berri-QUAM. On race days--especially Sunday--Berri-QUAM station will be very crowded with a bit of relatively polite pushing and shoving to get off one metro and on to another. Have a meet-up plan for Jean-Drapeau as you may get seperated.
There will be multiple F1 events and parties on the street of Montreal. Food, drinks, bands, etc. I could never find a website that listed everything going on. Montreal is a very safe city, but I am sure that every pickpocket in Canada is working these events. Additionally, an F1 race is so much more than just F1. Look at the official site to see what other races are taking place each day (F2, F3, etc.) You can spend a full day at the track with all that is going on. Food and drink options at the track were typical festival foods and prices.
Lots of things to do, museums and attractions in Montreal. What you do simply depends on you and your families' tastes and interests. Great dining options as you have both the French influence and a very globally diverse population. At the risk of offending some of our Canadian members, get the bagels and skip the poutine.
Enjoy
