If your children are under age 18 they don't need the passes for Italian state museums. Some other attractions covered by the passes may require a small fee for children; have their passports along for proof of age. No, you do not lose your skip-the-line privileges but everyone, pass or not, has to go through security check queues and that one has been reported to be lengthy during busy times at the Colosseum.
"Free" does not apply to all public transit benefits provided with the Roma pass, though. Children under 10 travel public transit for free in Rome but you would need to purchase tickets for older children. Florence is small so you don't need to buy the Firenze card with the additional transport option. Neither Roma or Firenze pass covers you for transit to/from airports.
The Roma pass does not cover the Vatican, and you have to make reservations for your children (as well as yourself) at the Borghese even if they are young enough to be admitted for free.