It is possible to find 3 redemption seats in WT+ or Club on the same flights on both DEN and TLV routes - but it may not be on the exact dates you are looking for so a little flexibility does help. You can check availability on-line 24/7 on BA.com.
Fuel surcharges - unavoidable, i'm afraid and they apply to redemption bookings at the same rates as revenue bookings, to children as well as adults. More on that here:
http://www.britishairways.com/travel...e/public/en_gb
If your 3 year old is travelling on the same booking the entire party will be assigned seats together three days before departure. Then, at 24 hours ahead of departure when online check in opens, you can change the seat assignments if you wish.
Heathrow in general has improved greatly in the last year or so. Although far from perfect, I rate T5 much higher than FRA, AMS and CDG for convenience and comfort as a transfer point for business class passengers