It's more complicated than you think. I appreciate the suggestion, and hope you can answer my questions below. Part of this long essay is my effort to problem solve, not make it TL;DR.
PRIVACY:
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Before Family Sharing was available, we had to find a way to make it work. And after sharing came out it was so buggy that we were warned away from using it. We had already set it up the right way - each of the 5 of us (me, my wife, and kids) are all signed into our own private iCloud account for personal data (contacts, calendar, notes, reminders, iMessage, FaceTime etc). We just use a shared ID for the store - my original .mac Apple ID from 2003 before anyone needed an iCloud account.
So we don't share call logs, or get the other's private messages, etc. We use the shared iCloud account only for our iTunes Store and App Store purchases, or home sharing ID for Apple TV and iCloud music sharing and such.
What I don't like is that the kids can access my private PDF files on the iBooks cloud with the shared iTunes account, so I started to save them in adobe acrobat's cloud instead. But this does give us a family calendar and notes we can share, separate from our private ones on our personal Apple ID.
PURCHASES:
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Because we had too many iPhones and iPads for the 10 device limit, my eldest daughter has iTunes on her MacBook logged into the shared account, but her iPhone is logged into the iTunes store with her personal apple ID. She typically would sync everything from Mac to phone via iTunes anyway, and if she needed something desperately while away from the Mac she could buy it on her phone and later sync it back onto her MacBook (where everything is merged and MacBook is authorized for both apple ID).
She turned out to like the idea of buying music and movies that would always be hers if she was to be cut off from the shared iTunes account. She's transfer content to her Mac, and with home sharing we could access it if we had our Macs authorized for her Apple ID too (three of us have done so).
All the kids know that they can do the same thing, having their personal account on their iPhone iTunes Store and the family account on their Mac, and if they want to buy something that I don't want to approve paying for (especially as they get older) then they can buy it on their phone. Then they can transfer those purchases from phone to Mac and merge everything, and sync everything to the phone as they wish. They only have to authorize their Mac for both Apple ID. That was before iTunes 12.7 and no more download apps on the mac - this won't work anymore if they have to re-buy all their apps on their phone with their own ID.
FINANCES:
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With family sharing I HAVE TO PAY FOR EVERYTHING, while the way we have it set up now I don't. Before iTunes 12.7 they can buy apps on their mac with my Apple ID and send it to their phone, or buy them on their phone with their Apple ID and transfer it back to iTunes, and sync apps and media back and forth whenever they want.
It looks like I'll have no choice now but to set up "family sharing" with the wife and kids and invite them to join, so that everyone will be able to download Apps on all their devices (5 apple ID x 10 devices each), now that iTunes 12.7 won't let them sync the apps to all their devices (10 device limit with 16 devices).
What I don't like about family sharing:
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(1) "After you set up your family, any time a family member initiates a new purchase it will be billed directly to your account, unless that family member has gift or store credit. First, their store credit will be used to pay the partial or total bill. The remainder will bill to the family organizer's card."
My concern - The way we have it set up, if I pay for it it's mine and if they pay for it on their mobile device it's theirs. But Apple says that won't be the case anymore, unless they're generous enough to buy an Apple gift card and apply the credit to their account. With Millenials these days I doubt this.
(2) "Once paid for, a purchased item is added to the account of the family member who initiated the purchase. In other words, the content belongs to them, much as it would if you were buying them a book or a DVD. If Family Sharing is ever disabled, each member will keep the purchases they initiated, even though they were paid for by the family organizer."
My concern - losing content I paid for. If I am the head of "my family" and they are a member of "my family", can they later set themselves up as the head of "their new family" when they marry, and share with their family member without having to leave "my family"?
Otherwise I'd lose access to all the content they bought with my money and shared with me, once they set up their own "new shared family". I understand that only their purchased content will be available to "their new family", and not mine or "my family" members content. Does this sound like it would work?
(3) What happens if we're already sharing location in "Find my Friends"? I see that they will also now show up in "Find My iPhone" - but can they also accidentally mark my phone as lost and lock me out, or remotely wipe data like we can if an iPhone is lost and we go to iCloud.com to find it?
(4) I want to keep purchasing media and apps with the same Apple ID as before (iTunes music library), while using my second Apple ID for my personal iCloud services (my iPhoto cloud library, contacts, calendars, etc). I don't want to have my purchases spread across both of my Apple IDs.
If I use my oldest Apple ID that I always use for purchases as the parent account, then it's the wrong one for location sharing or find my iPhone, etc. And, I can't share my 2TB iCloud storage because it's on my personal iCloud account, and not the one with all my music and apps.
FIX - I suppose I'd have to put both a of my Apple ID in the family sharing (it does allow for 6 members, and there are 6 Apple IDs between the 5 of us). I'd have to make the iTunes Store Apple ID as the parent, and invite my personal Apple ID to join the family.
Then I'd have to buy a 2TB storage with the parent account and move everything over? But at least we could save from the wife and kids having 50-200GB storage on top of my 2TB of which I'm using 10%. How would this move work if we all have iCloud photo library turned on in our own upgraded personal iCloud accounts?
