There are several easy ways to prevent a straddle cable from fouling the tire such as fenders (your child will appreciate those) or reflector/light mounts.

if you switch to V-brakes, you’ve already figured out the brake lever issue. Having worked on LOTS of bikes with both types of brakes as a volunteer for the last 8 years, I’d stick with canti’s, but get good ones. Those you mentioned are excellent and widely available used. Tektro/TRP and Avid make some that use road style pads, which I’d prefer.

Good buddy [MENTION=401497]RiddleOfSteel[/MENTION] tried mini-V’s and as I recall, he wasn’t thrilled with the feel of them. He might weigh in now that I’ve mentioned him. He also has considerable experience dealing with narrow post spacing.