Have a separate room for the office. That being said, it's adjacent to the kitchen and has no doors, so there's still traffic.
I don't think kids are a non-starter for WFH. Have one ten year-old kid. I think it's about setting and enforcing expectations in terms of "work-time" vs. "home-time".
Of course, if your family doesn't respect or support you in that, you're going to have problems no matter what. Everyone(kids, spouse) needs to be involved in an honest discussion where expectations are set.
Architectural nice-to-haves:
* Doors on the office.
* Multiple floors, with the recreation room on a different floor.
* Plenty of windows for natural light
As far as equipment/hardware:
* Adjustable standing desk(love my Jarvis Bamboo)
* Good chair. I mean a good chair. Herman Miller Aeron for me.
* Dual monitors mounted on arms. Amazon Warehouse has consistent deals on Dell 27 in monitors.
* I use a MBP, so I've got a vertical stand and Pluggable TB dock.
* Logitech MX Master
* KBC Poker II
* Comfy, decent headphones
What's been huge for me is the ergonomic stuff(chair/desk). It's a big expense up front, but believe me, it's worth it if you're going to spending 8-10 hours a day there. Plus it's tax deductible. Do yourself a favor a splurge there.
Overall, WFH has been a huge productivity boost to me. I make sure my employer sees the benefits of my productivity as well, and I work very hard to ensure they have no reason to be displeased with my output.