Children are often accommodated free of charge when they sleep in the room with the parents. Food is a different matter, in most cases an extra charge applies. It would be best to discuss this ahead of time with the LL Concierge or you may contact the hotel directly before you bid on a package. As a rule, the packages are for two adults. However, it never hurts to ask... but ask before you bid to avoid surprises.
Good advice from LL_Travelfan. Prior to bidding on an auction item or buying a package, contact the hotel directly. I've found that most hotels are pretty flexible with their packages,, even when they specifically state that they are for only two people. In some instances, the hotels are not able to accommodate you because of physical limitations, i.e., all rooms have one king bed. In cases where there are no physical limitations, you have a good chance of getting the hotel to accommodate your needs. We also have two children and I can empathize with your situation. Good luck and happy travels.