I LOVE Osaka!
I cannot emphasize that more lol! The castle is beautiful and anyone of any age can appreciate it. I love the Temple as a PP has mentioned and the Tennoji Zoo is also a good place that your kids may enjoy.
http://www.tenzoo.jp/english/tennnouji.html
(There is an official website, but it is only available in Japanese).
A wonderful hotel which I've have stayed many times and has beautiful views of the city:
Rihga Royal Hotel Osaka 5-3-68 Nakanoshima, Kita-ku, Osaka 530-0005 Japan Phone: +81 6-6448-1121 Fax: +81 6-6448-4414 Web:
http://www.rihga.com/osaka/
I hope you and your family have a wonderful visit to Japan, it is one of my favorite places in the world!
Have some authentic Ramen, Panda March cookies, and Green Tea Kit Kats for me while you're there! They are the best!