I like a lot of Karen's suggestions. I actually saw a kid's (around 10-12 years old) version of The Music Man a while back and it was excellent. It's also one of my favorite musicals. You can't beat strong leads like Harold Hill and Marian Paroo. The kid who played Harold Hill was amazing. He could belt out "Ya Got Trouble" and "76 Trombones" without missing a beat.
A second favorite of mine is Singing in the Rain. The songs are wonderful and the dancing is incredible. If you have an up-and-coming Donald O'Connor or Gene Kelly in your group of kids, this one's for you.
Grease is also a very good musical with kids at just about the right age.
Another one not mentioned would be Hello Dolly! The female leads are actually stronger than the male leads here, but it's a great story. You actually get three pairings here instead of only one. Just don't find a female lead who sings like Carol Channing.
If you don't mind kids playing adults, there's always The Sound of Music with the governess and the Captain. The older kids could play the adults while the younger kids could play the von Trapp children.
My son's favorite musical is Chitty Chitty Bang Bang. His favorite song is the title song. It's funny when he sings it since he's only just turned five. lol
Though I love My Fair Lady, there really isn't any romance in it, though the two leads end up together. Plus I wouldn't classify Eliza as a strong lead. She stands up for herself finally after being walked all over, but winds up going back to Professor Higgins.
You didn't mention how elaborate the production would be. Is it going to be something minimalistic like Our Town or potentially big like Evita?
Anyway, lots of good suggestions from everyone here. Hard to pick a loser.