Sounds like your dogs have accepted your kids as the littlest pack members and will protect them accordingly. They obviously consider themselves a the pack leaders.
I wonder about as the kids get older and bigger if the dogs will feel their place in the pack in jeopardy. I would look into that as time goes on. Figure out how to think like a dog and proceed accordingly, like Caesar on the Dog Whisperer. First step is to make sure that they see a grown up human as their pack leader.
I think Cesar would say that the dogs need to accept that every human in their pack is above them. Doesn't he say that every human family member should be regarded as a pack leader by the dogs, or something along those lines? If these dogs think they are pack leaders over the children (and the adults), that is a problem.
Also, dogs that "HATE strangers" and "HATE other dogs" and try to attack them do not sound like well-adjusted dogs at all.