arenal
 

nicest hotel for kids that currently has views of the lava flow?

Tough call due to Mother Nature and the ever-shifting flow of lava + the clouds that could possibly obscure such a well-planned view.

that being said, whats your best bet?

I'm voting for Los Lagos. It is not - as I have read here - on the side of the volcano which has the potential for the best viewing of the lava flow.
However, if you read posts by myself and others regarding this very issue, you may receive opinions from last season, the season before that, and the current season.
In this way, you might find (as I did before our trip in '04) that more opinions are a better thing than recent opinions.

Let me add this : When we stayed at Los Lagos, I saw many families with many children running around and laughing. Having grown children of my own, I still enjoy this sound.

Los Lagos is one of the hotels that is nearest the volcano itself. LL has an observation spot about which I have written so many times, that some might question my reason. We had THE best views from that spot at night, and in the earrrrrrrrrly a.m.

Multiple pools with slides, koi, lizards, crocs, horses, butterflies, frogs, etc.

Probably depends on how old the kids are. We are going with 13 and 15 yr "older kids". Almost picked Los Lagos but went for Observatory Lodge instead. Hoping for lava views and going for a more jungle atmosphere. I liked the connection to the volcano with the seismograph etc. Also easy for hiking. We can do pool slides here in the states.
Just a few thoughts from another mom.

Can't comment about kid friendly hotel in Arenal, but can tell you I was in Arenal 5/31-6/1 and the side where everything can be seen is on the opposite side from Los Lagos. Best you'll be able to see is a red glow at the top on a clear night. Stayed at Tabacon and it was only a glow from there. Arenal Observatory has the best, direct view right now. Flowing down both flanks with hotel in the middle. Lost Iguana also has excellent, but further back view.

We,(husband and 2 teen kids) are going back to stay at Observatory lodge. We stayed there in 2001, had no lava view, but really like the grounds and the quietude (is that a word?). Anyway, in 2003, we stayed at Arenal Paraiso, had a great view of lava. This time I asked my kids where they would like to stay, and they both said Observatory lodge. This was b4 I told them what I've read about the change in the lava viewing angle. This is a great place for older kids. We rented a car, and although I know it's a bit of a drive, it's actually very close to the volcano. The views from the Smithsonian rooms are unbelievable! I have been reading that the lava can be seen from Lost Iguana, but I know that the volcano is quite a distance from that hotel.