Our kids rec league starts at 3rd grade. When I train refs to work this level, I make sure they give the kids some leeway, but still make calls. That's how kids learn what they should and shouldn't do. For the first few weeks of the season, we have the refs say a sentence or two to the kid on why something was a violation or a foul but only when it wasn't obvious and to keep it to a minimum, or else the games would take forever.
My advice to you is to write on a piece of paper, "Are the kids having fun?" and tape it to the back of your hand. Look at it every minute or so. That's the point.
Kudos to you for doing this for your daughter and her friends.