I'd contact the USA DOT pointing out not only the IDB compensation due (however, the $1350 per person depends on how much the original ticket cost) but also that KLM/DL (I suspect that the GAs were really DL employees, and if the flight were under DL airport control, DL agents would be the only ones able to assign seats) violated the rules by failing to ask for volunteers before you were denied boarding. If DL's IDB rules apply here, they also violated their own policy (as required to be filed with and approved by the USA DOT) in not considering elite status (for all three if it was a single PNR). A GM should never experience a IDB.

Did you ask for a redcoat or some sort of supervisor/manager at ATL?

BTW, the DL codeshare and DL ticket for a KLM operated flight make the USA DOT IDB regulations more problematic and allow the partners to point fingers at each other, but who ends up paying the compensation isn't your concern, nor is how they negotiate the assignment of responsibility. You're just entitled to compensation from one of these supposed partners.

Also BTW, I can't see from the "seat request" boarding passes whether your FF number and GM status were properly reflected on these documents, nor whether everyone was all on the same PNR. Sometimes PNRs get split during IROPs, unfortunately.

I'm also wondering whether some lazy DL GA in AYL didn't want to deal with the issue of having your four year old seated near a parent and thought that he/she could get away with a nice and easy IDB instead. If you three were the only ones who didn't get on the flight, I wonder whether you noticed a longer standby list on the gate monitors (or maybe even the DL app), where you were on the list, and whether the priority shown on the list was properly followed. I would hope that heads would roll if the GA decided to instead board some nonrev friends and family.

I think you should post something about this in the DL forum so that people more familiar with IDB rules for codeshares might reply and also so that maybe some kind DL employee who participates on FT can see whether any genuine standbys or nonrevs flew the flight on the given date. However, the travel was in November and "normal" DL employees no longer have access to such information. Surely someone on the DL board can say more about how ATL departures on KLM metal are handled by DL, especially when it's a codeshare ticket.

Since KLM is an EU carrier, you might also want to check what EC261 regulations say about this situation. The resulting delay could be worth a lot of cash, but I suspect that you can collect either under USA DOT of EC261, but not both, but you would probably be allowed to choose. IMO the definitive thread on this is in the BA forum as it includes technicalities of how compensation (or whatever it's called) should be calculated in great detail, including for award tickets, but I don't recall seeing very much about codeshare issues beyond the observation that the passenger should get the cash and the involved carriers can fight between themselves about who should really contribute the funds.