To the flight times, we travel from SMF to the east coast several times a year with 2 kids now 7/9 and have since they were born -- neither my wife nor I are morning people, but we quickly discovered that 6am flights were the best for us. We let the kids wear their clothes to bed the night before, and pop them out of bed while it's still dark; they think this is great adventure. They're a bit lethargic during the first flight, and sometimes nap during the 2nd, both of which are great. The key is we're done traveling as early as possible also, before the really cranky afternoon/evening hours, and it helps get settled on the new schedule. Much better than getting in late evening and trying to adjust.
As to SFO vs SJC, I'd agree that the non-stop is best, even at the cost of a half hour or so more driving. If the option were MRY, maybe that would be different, but SJC just isn't *that* much more convenient to justify the connection.
Most important thing though is to have the parents responsible for the decision -- you don't want to be the one that convinced them to grudgingly take the connection when that flight OKC to DEN flight is delayed an hour missing the connection, the next flights are full, and they end up standing by all day for seats not together, or stranded overnight.