Hi kantlitz -
I love the Lakes - even when getting a proper soaking like last week - and don’t blame you for wanting to spend an extended time there. My personal favourites are the Coniston area and the valley of Langdale, although bar Elterwater and maybe Chapel Stile there’s not much in the way of settlement in the latter. Check out The Britannia pub at Elterwater, or if you want upmarket, The Eltermere Hotel. (For either staying or just eating out).
Also check out the area around Patterdale and Glenridding, a magnificent part of the area, and another personal favourite.
Grasmere and Keswick are must sees for me but they get incredibly busy and Windermere/Bowness and Ambleside have lots of shopping opportunities but are similarly overrun by tourists/day trippers and I’d personally try and avoid them.
As for hiking, I guess it depends what you mean by ‘hiking’. I’ve seen comparative babes in arms summit Catbells although it gets a bit ‘hands out of pockets’ near the top. The Old Man of Coniston has good well made paths all the way to the summit, but is undoubtedly a long, tough-ish climb and descent (I find the descents more tiring than the ascents if I’m honest) as is Skiddaw from Keswick. No journey out onto the fell tops should be underestimated given the vagaries of the English weather, so you should be well equipped and prepared. The news has been full of reports of people getting into trouble on the peaks (in admittedly poor winter conditions) of late, sometimes, as was the case in Wales recently, unfortunately with fatal results. I’d suggest having a look at some of these routes in detail to determine whether they are a bit over ambitious for your kids.
Easier walks include some or all of the walk round Derwentwater from Keswick (use the Keswick Launches for access if not going all the way round), I also enjoy the walk up by Lodore Falls from near the Lodore Hotel - usually we’d walk on to Watendlath and descend into Rosthwaite (the bus runs through this little village if tired legs are a problem here). Also in this neck of the woods is Castle Crag, a fascinating little hill with caves and quarries, which once had an ancient hill fort on it, and it gives a sense of mountain climbing without actually climbing one of the big ones. Latrigg from Keswick is another that has excellent views on a clear day without venturing too far from Keswick. More walks in the Lakes than you can shake a still at - Helm Crag (sometimes known as the Lion and the Lamb, the view from the main road near Grasmere illustrates why) from Grasmere, Castlerigg Stone Circle from Keswick, Hallin Fell from Howtown on Ullswater, etc., etc., - please feel free to ask more here or by PM if you require further advice.
I’m sure you’ll find that however long you spend in the Lakes, it won’t be enough, (I say that as a born and bred Yorkshireman too!) and I hope you have a great trip!
Ian