Hi LMS. No kids here (just cats) but I'm a teacher and a student, too. Your level of use sounds similar to mine. I have tons of windows open--browser tabs, Excel and Word, a statistical analysis program I use for teaching and academic research, sometimes Skype or Zoom, too. But I do very little that power users would consider processor-intensive.
You won't have a problem with performance on the M2 MacBook Air like you did on the 2017 Air. Starting with the M1 MacBook Air introduced in December 2020, Airs have been much more powerful and cooler-running than any previous Air. That M1 Macbook Air will continue to be in the lineup, and even though it's nearly 2 years old, it is still an excellent laptop. The M2 Macbook Air will be a little better in terms of performance, and a lot better in other ways -- better display, webcam and speakers.
Regarding what configuration to get: the first decision when you're configuring your machine through Apple's website is whether to get the 8-core GPU or the 10-core GPU. I don't think most people will notice the difference; I definitely wouldn't in my use-cases. Next is RAM and SSD. If you can afford it, get 16gb RAM and 512gb SSD. Each of these adds $200 to the price; if you can only afford one of these two, I think the SSD upgrade is probably more important than the RAM upgrade (though some might disagree and argue that you can plug in an external SSD to increase storage but you can't plug in an external RAM module).
A cheaper option is to get the M1 Macbook Air, the one from December 2020. Despite being the cheapest mac in the lineup, it is a really really excellent computer and will continue to be for years. When I got mine, I was near the end of my first full semester of heavy pandemic online teaching. My previous computer (a Macbook Pro from early 2020) sometimes couldn't handle Zooming with my class while having lots of other apps running and windows open, my webcam, and a high-res camera I had pointed at a whiteboard in my office The M1 Macbook Air could handle it EASILY, and never got hot.
I hope this helps a bit. Good luck! And bless you for being a Mom and a teacher!