If the kids are shorter than 5' tall, in the CampInn model 560, the couch converts into bunk beds.
Otherwise, I've heard of people using a tent, like an "SUV" type tent, where if you are concerned the kids might want to do late night adventures, you orient the opening to the teardrop door--so they have to climb over you to get out of the tent.
Another thought--the Northern Breeze tent is a fairly popular tent with CampInn owners, because of its size and versatility. You could have the teardrop enclosed almost completely (except for the hitch) in the Northern Breeze, AND the kids in the tent as well.
Nothing beats going to a gathering, and talk to teardrop owners, and see their configurations, and how it all works. Over on the left above are links to tearjerkers and t&ttt; teardrop gatherings are planned and discussed on those forums quite often; hopefully you'll find one close enough to attend.
Also, CampInn could get you in touch with existing owners who have similar needs, and/or owners near you to go check out a CI if you haven't seen one in person yet.