AC Boy's advice is very good and I would urge you to heed it. 1hr is very tight for the itinerary you have. I would be uncomfortable with this traveling alone and without luggage: in your situation I would work very hard to change it.

I have a very hard time believing you will be asked to pay change fees for this at the airport. AC's system is simply absurd when it comes to the kinds of itineraries they allow you to book. I am reasonably confident that, if you check in with luggage and 2 kids and explain the situation, and if there is room on an earlier flight, the gate agent will check you in at no extra charge. In my experience they are often quite sympathetic with this sort of issue, and often quite annoyed with the AC system that allows such unrealistic connection times, since these are the same people who get stuck picking up the pieces when a family's vacation is ruined by misconnect. (Perhaps AC Boy can correct me if I'm wrong.)

You might perhaps point out to the agent, politely, that while it is true they might lose one or two hundred in fees, if you stick with your (legal itinerary) they could also get stuck feeding and lodging a family of 4 with a misconnect and then later compensating you for your missed hotel reservation, rental car, etc., etc. All in a all a good deal for them.

In fact, you might try calling AC right now and asking if they will re-book you -- at no fee -- onto a different flight out of YYZ. Tell them that you booked this because it seemed convenient but that friends have since told you that it is very tight and you would hate to be in a situation where AC messed up your vacation. (No doubt they would hate to be in that situation too!)

If they refuse, I would still get to the airport early and then argue your way -- politely, of course -- onto an earlier flight. You will not regret it.

It is a mystery to me why AC doesn't fix its system to eliminate these sorts of connection times. Another reason to go with a TA, in fact, who can often catch these things.