Ahhh. The joys of threesome diving.
In low vis situations, it's best for the leader to be in the middle and the other two to be in flanking positions on either side of the leader at the same depth. This is pretty tough to do with inexperienced divers.
The configuration in which your kids were on the reef-side with you on the outside would seem to be the best solution. If your kids were "fighting to stay off the coral," then they need to really work on their buoyancy control. Have them practice in a pool at home before the next trip...or enroll them in more advanced training. As you know, neutral buoyancy only gets easier with practice. It is possible for beginner divers to have good buoyancy control -- usually this is determined by the quality (and duration) of instruction.
The majority of my diving is done in a threesome. All three divers, however, must have the skill and the proper attitude to make it work. No one should ever be placed in the position of "monkey-in-the-middle" with the other two divers swimming off in opposite directions.
Have fun out there...