I'm using the G27.
Compared to using the DS3 it's a big change. It takes some getting used to. What I find most difficult is braking properly when also using the clutch, since I usually do left foot braking with the paddle shifters.
In real life I am now a calm and controlled driver. In the past, before I could take my daredevelling on the console, I would do stupid things on the road. I now know that it's easy to lose control of a car, and the things I've learned about proper braking distances, under/oversteer, and weight balance have given me a finer appreciation of what it is to drive.
GT5 actually may have saved my life last month. I was driving down the highway at 100km/h, and I saw a large black abyss on the road in front of me. By the time I was not 20ft away from it I realized that it was a black bear, and it was taking up 3/4 of my lane. I swerved the car into the oncoming lane (thankfully empty) and calmly but firmly reversed my swerve back to my own lane. If it wasn't for the car balance I've learned through driving in GT5 I would have unsettled the car and plowed into a forest.
As for your children, I think common sense will allow them to know that a game is a game, and life is not the game. That being said, you should fully expect a 16yr-old beginner driver to drive like an idiot. Testosterone + inexperience = dented bumpers.