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Iceland or the Nordic countries in May with children ?

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We are confused between visiting the Nordic countries or Iceland for a 10 day trip in May with 2 children aged 13 and 11. Our requirements are:

1) Do activities like snow mobile, sledding etc.

2) Stay in a igloo for a day. I heard there is a igloo hotel somewhere in one of the Nordic countries.

3) Visit couple of cities in those countries which have architecture, night life, good restaurants etc.

4) See the midnight sun

Which of the two options above is more enjoyable in all respects ? We are total vegetarians also. Is Iceland too sparsely populated which might make it boring to take long drives. But then I am assuming, the Nordic countries are also sparsely populated.

Thanks a lot in advance.

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