My husband and I deal with the nips, but our 5 year old jerks her hand back even though we are trying to tell her to touch their back and not their face so they don't nip...but yes...difficult.
I see adults doing that too with dogs, the jerking the hand back thing. The dog doesn't even need to bite to do damage. A hand or finger accidentally too close to teeth as the dog bounces around + a quick pull back = torn skin. So regardless if you end up keeping the pups or not, I'd definitely work on teaching the 5 yr old how to pet a dog safely.
So sorry it didn't work out. At least you gave it a lot of thought and made the decision while the pups were young so hopefully they can find new families ASAP (in my area puppies are snapped up in 1-2 days). Don't feel ashamed, it might've worked out if a few things were different (maybe 1 pup instead of 2, maybe the kids being slightly older, etc) but with all the circumstances right now, now wasn't a good time. I also considered returning the last 3 dogs we'd adopted (all for different reasons) so I know the amount of time and work needed in order to make things work out can be way more than most people can deal with, and you've got kids and a pandemic to worry about too!