I prefer this solution:
Dastardly said:
(As for the killing of kids, I think an acceptable compromise would be to link each child to an adult NPC. If the adult is killed, the child simply fades out. This way, the "whole village" is killed, but there is no need to depict dead kids -- what, are you going to loot them? -- and no need to empower the player to kill them.)
They're both good, but I don't really like the way that the quest essential characters are immortal either. Though I must say, the OP's solution is much more logical from a development standpoint and I really don't see why they didn't do that in the first place.
As for the larger question, I just don't care. Some people want to kill children in games, fine. Some think that's weird, fine. I see either party's point, but I have absolutely no feelings on the matter. I'm a very opinionated guy and this is a really weird feeling, but it's true.
I am happy there are mods though, that way everybody can be happy. That is, if people would just try to accept other people's differing preferences.