I agree to the soul of your post but my personal addition is that there is nothing wrong in allowing kids to join other’s celebrations (as far as those are not in conflict with rules set by Islam).
Many people might have problem with this, but we think, that up-bringing of kids depends on 2 environments
- public (school parties, etc )
- home (leading by example)
While you can not close-shut the public life for kids you can control it and still have greater influence on them in private life (at home). You can always control the importance of anything (for kids) by personally celebrating or not celebrating it. My kids know that their Val day ends with the distribution of $2 cards and $2 chocolates in their class. They never see me and my wife celebrating it with red chocolates, candles, bunnies etc. So they know its a day that we (muslims) dont really celebrate but when it comes to eid, they not only take goodies to school but see it celebrated at home and in family extensively.
These are few difficulties that you face once you move to non-Islamic country i.e where majority of population is not Muslim although I have seen on TV and have been told by my parents that Val day is celebrated on larger scale in Pakistan now than in west and in some areas its more celebrated day then Eid.