First of all, I commend you for allocating 12 days for this trip. Too many people try to "see Alaska" in eight days, six days, or even three or four days.

Now, on to your question:

Having grown up on road trips like this (every summer doing month-plus-long road trips driving an average of 300 miles per day--yes, that includes stops in cities and things), I can say I would enjoy a trip like you proposed, and slowing down much would have left me feeling like I didn't "see" enough. But you know your kids' personalities and travel preferences better than any of us and would know whether such a "breakneck" pace would leave them unsatisfied.

If you want to shore up your itinerary, here are the things I'd say you could leave out without compromising too much:

• Barrow: while I haven't been, I've heard it's worth barely a half a day (and that includes the trip to the point). I'm a bit of a geographical extreme point collector, so it would appeal to me, but for most visitors--I'd say skip it.
• Skip driving to Copper Center via Fairbanks/Delta. Views are meh. Backtrack down to Wasilla/Palmer and come across the Glenn. Backtracking isn't a huge negative: it gives you an extra day to see the mountain if the weather is blah, and it's only a couple of hours until you hit new road. The Glenn is far more scenic than the north end of the Parks (rolling hills) and the north end of the Richardson (rolling hills and some flat areas). Only downside is you'll miss Fairbanks, which most here seem to say isn't worth a visit but I have a soft spot for. I like the older, gold rush/frontier feel of the town, and there are several attractions in the area that are worth stopping at if you have extra time (some of note, like the Museum of the North, and some more kitschy, like the Riverboat Discovery and Pioneer Park). If your schedule is pressed, though, I'd agree to skip Fairbanks.
• I'd agree with the other posters and say skip the Columbia Glacier tour. Save yourself a day and just get on the ferry from Valdez back to Whittier. You'll have seen enough glaciers on the PWS glacier tour and full-day Resurrection Bay tour anyway. Columbia is impressive but not worth a whole day. (And if you have a good captain, he might take you in the bay far enough to see Columbia, though he won't get as close as the tour boat operators due to political pressure from them.)

Also, to address a couple of other points:

• Yes, you can visit Byron Glacier late at night. When you're here, the sun won't be setting until 11:30pm, and it barely gets twilighty before the sun starts rising at 4:30am. (BTW, bring eye masks if you think you'll have trouble sleeping when it's light. Note that you will have more energy, though, and will want to sleep less.)
• Since you have two nights in a row in Denali, be sure to be open to extending your bus trip all the way to Wonder Lake. If the weather is crappy, don't bother, but if the sun is shining (decent chances in July, though certainly not guaranteed), go to the bus expediter at Eielson and ask to upgrade your tickets to Wonder Lake. It'll definitely be worth the extra time if the mountain's out.