Quick Update:
Thanks for all your feedback.. Agree with Etihad choice.. BUT..

unfortunately.. somethings changed and now we have to fly out of EWR (Newark , NJ) instead of JFK to BLR.(Bangalore, India)

So this has brought me again to two choices BA vs Lufthansa. Looking for Econony low priced tickets for 4 (2 toddlers) . I find:
- Both have prices almost the same.
- I dont mind miles either via BA(American Adv) or Lufthansa(United miles)
- Deciding factor could be the planes the airlines use as friend pointed out - that BA flys 777 and Luft flys 747 . And, 777 are apparently better, more space, less noise compared to 747. I am checking seatguru as well.

Now, I am not a regular travellar. Appreciate if you could please share your experiences on these Airlines and planes which helps me decide in next two days.

Thanks in advance.