Mom has been much more relaxed about him with the kids. I took him to my nephew's first birthday a few weeks back and he did really well with all of the commotion and the kids being around. He was off leash for part of the time, which was reassuring for me. He made a beeline for the car as the party was winding down, but two hours of positive experience was good, I thought.
We've stuck with the agility and he seems to have perked up a bit...only took 4 classes . I didn't find out until the most recent class that it wasn't intended to be a beginner's course (It was just listed as "poles and weaves agility" and the only requirements listed in the sign up were a solid stay and recall off leash)so we're going to take the beginner's course next and see what happens!