With the visiting kids as the main goal, go with Option 1 but forget the slide and shower. Instead of cassette toilet, go with a porti-pot for the night time only calls of nature. I would also go with a DC compressor fridge so you don't have to worry about parking level during your travels.
Or don't worry about what the outside of your camper looks like and continue to use it. As longs as it doesn't have any leaks, it still has another 10 - 20 years. If you are getting 12 mpg with the current rig and fuel is $3/gal, you can drive 80,000 miles just for the cost of the van, 150,000 miles if you only look at the mpg savings. Anyone who makes a big purchase just to save a few or even half the mpg really isn't saving money.
To help reduce the cost for each trip, stay longer. Or stay a weekend, travel locally for a week or two, then go back and visit again. You could do this two, three, five times before going back home (if you are retired).
Or get rid of the dogs and gain a whole bunch more freedom by not having to feed them, be home at a certain time to walk them, go where dogs aren't allowed, be able to stop on a whim without having to worry about them in the hot car, etc. (But don't worry, I know this isn't going to happen, but is an option.