I fail to see how this is a bad thing at all
But, I'm with you - "humanizing" airline travel a bit is probably a net good. These days, basically nobody enjoys flying for myriad reasons (almost all of which are vaguely caused by a "race to the bottom")
Cost-wise, kids should be 50% off.
Make it more like a resort where you hand off the kids to the on-site daycare and enjoy a carefree day. Need a staffer, but the extra seating capacity should cover it.
We have on-board showers, individual cabins, sit down bars, but where’s the onsite daycare?
Charging for access to the already-existing seat selection feature when booking is a classic tactic of price discrimination to squeeze more money from people who can afford it.
So this could impact profits, but not costs.