As for what the kids want to play....I don't know about anyone else here, but as a kid I didn't have great taste in games. I was disappointed if they were too short or too easy, but I didn't bother to do much research ahead of time. Back then I would have been very interested in both racing games, Super Mario 64 and Spider-Man, and I would also have wanted to play my old games on the new system.
As for the early lineup for next year...seriously, when has a system released at Christmas ever had a good selection of games in the following year? I'm not sure about Dreamcast, but I know that N64, GameCube, PS2 and Xbox all faced several months of weak releases in the new year after their launch. And two first-party games from Nintendo in the first quarter is actually good for Nintendo, even on systems that have been around for a couple of years. It's the third parties that need to catch up (which is fair enough considering they've only had about a year to work on the system).
Yoshi's Touch and Go and Wario Ware don't scream "Blockbuster!", but what I've seen of them so far suggests that they make more interesting use of the DS' capabilities than most of the games available now. My only fear is that Yoshi will be rushed, I'm looking forward to that one.
Edit: I saw a ton of DS's when I was shopping on Monday night, now I know where they came from! I wonder if Nintendo will sell all of these before Christmas? There seemed to be a lot left on the shelves.