Why not just keep it nice and simple for the "Mini skippers"???

I started off sailing Sabots . I believe that Optimists are now alot more popular these days and are quite similar to Sabots.
From my experience with kids learning to sail it is a mistake to try and teach them to sail and race bigger boats or "powered up" dinghies. They need to be able to controll a smaller boat first , get the core fundamentals of sailing and then have a look at a more exciting class / fleet .
As for your / thier height , thier not going to be over 5'5 by the time they are 14 are they???

When it comes to racing , personally I think the biggest part is rules knowledge. Tactics is also important but that will come with experience.
Most people only know about 5 rules but if you know your stuff then you can really controll the fleet . Here is a really great site / simulator that the kids will have fun with and learn the racing rules of sailing
demo.expertusone.com/Hope this helps Matt , let us know how you get on.
Kearnsy