Welcome Cleanup! We are a family of 4 with a 100 lb. lab that live aboard our Transpac 49'. We are new to this live aboard life, but have spent a lot of time with friends that also live aboard with their 2 children. What has worked for us on our boat (and also our friends' boat) is to have the kids where their life jackets whenever on the docks or on the deck of the boat. By the way, our kids are 7 and 4 years old. They do not have any problem with this rule. It's what they are used to and know we will not bend on the issue. We have the mustang pfds. They work great for the kids. Whenever the kids are playing on the docks we make sure their is an adult with them. Our oldest daughter fell in a couple of weeks ago while fishing and it was no big deal. I just scooped her right out by her life vest handle. We also are in the process of putting netting up all around the boat. When we are underway, we are okay with the kids being on deck. However, if the weather turns bad, we have them stay below.
As for putting children at risk...Any drownings that I have heard of have occured because a life vest was not worn. I don't know the percentage, but a much, much higher number of children drown in pools. I believe it's wonderful to show your children what following your dreams is all about. I believe the "risk" is totally worth it. I could really get on my soapbox here, but I'll spare you all!
Even in the short time aboard, I have seen so many wonderful things come out in our girls. Their curiosity and learning has totally blossomed! Feel free to pm me if you have any questions. Best of luck to you!