Have you done any usability testing with little kids? I'm intrigued to know if they'll be able to instinctively navigate through the options. Also, isn't using the hardware back button is going to end up with countless accidental app exits?
I tested mainly on my 4y old son and then asked few friends to test on their kids. No problems reported.
Re HW button - I am thinking about design without it especially because I am going to build iOS version that doesn't have one.
