I flew with Malaysian on my own a few years back, no kids.
The are very professional, the inflight entertainment was great I know my kids would love it as like a lot of airlines they are tiny screens on the seat backs with your own hand held contoller for games and movies.
The only thing that would make me unsure was the food, I wasn't fussed and I spent 9 years working for airlines so have sampled quite a lot of airline food and don't think I would be as fussy as most. I don't know about your kids but I don't think mine would have eaten it-although some airlines do allow you to pre-order kids meals!! or you could feed them at the airport and then bring sandwiches and fruit on board-just my opinion.
Kuala Lumpur airport was lovely and spotlessly clean I think they also have a transit hotel too
Good luck with the choice