I just took a trip to Washington State from Colorado Springs, CO with 3 kids and a dog and had no issues with room for the kids or dog. On the way back we had 5 kids and no dog and still no issues with room. The kids slept in the back with no problem, and everyone seemed to be no worse for wear. The front seats recline WAY back and so its great for sleeping in a rest stop. Our kids are between 10-4. For most of the trip the 7 and 8 year olds were in the far back (makes it easier to smack the 4 year old causing trouble).
On the trips, the only issue seemed to be the cupholders for when everyone was eating - if you put three people in the middle seat, no one has any cup holders in the middle. The back two are fine. We just purchased 2x $5 "seat wedge" cup holders for the middle seats - they hold drinks, PSPs, and books AND they keep all the kids in "their" part of the Jeep.
I would go with the HEMI because, well, the more the merrier. I had no issues with stock off-roading in light-moderate areas.
I would definately buy another Commander - if this one ever wears out. This is my first Jeep (my last kid hauler was an Expedition), and I love it.
Some pics from the trip showing the back seat and kid placement...
You can't see the dog, but she's laying down in the back (she's a Yellow Lab / Bassett so she's short and fat).
The five kids without the dog - I think they are looking at Buffalo in Yellowstone...