I think I am with Lucky on this one. Because you have small kids and we can't trust this dog with them - the dogs life will be too isolated and she doesn't deserve that.
I hate to encourage anyone to rehome, but we need to think of the children and the other dog too. Biscuit is too willing to use her teeth and she needs some very strong - one on one - leadership. I am not sure you are up for it with so many small children.
Better to rehome now before something worse happens, and she is still young enough to be of interest to someone.
Love Them & Lead Them,
~Elizabeth & Doug
Dog Training the Way Nature Intended