The school issue is huge. My son is now in 4th grade. When I was single I loved living in Chicago, but after my son was born, the paperwork, uncertainty and difficulties with the CPS just didn't make it seem like the best choice for us and I did want my son to go to public school ( not like we could afford private anyway, lol).
My son spend kindergarten and 1st in the Oak Park schools, at a small neighborhood school that I loved- but when it was time to buy a house we just couldn't find anything we liked in our price range- and taxes there were outrageous.
We ended up with a nice little house in a small suburb- with a GREAT school. Although adjusting to the burbs was something of a change, having a garden, a neighborhood where everyone watches out for everyone's kids and a school with only 300 students and 17 kids in the class has made it totally worth it for us.
Right now your kids are little enough to make the transition easily. Elementary school starts to get 'harder' with homework, etc. in 3rd grade as a rule. We moved right before my son went into 2nd grade because we wanted him to have an 'adjustment' year to make friends and learn his way around before school got more serious. It worked out perfectly and now he is happy, well-adjusted and loves his school and our neighborhood.
Your family will miss seeing the kids, of course. But you work it out. My family is ALL in Ohio- but we go there for some holidays and my brother's family comes out to see us for a little vacation. My mom and dad also come out to Chicago and now that my son is old enough, he flies to Ohio as an 'unaccompanied minor' in the summer and spends 2 weeks with his grandparents, aunt and uncle and cousins, going fishing, playing chess with grandpa and just spending time with my side of the family.
Do what you really feel is best and remember that a good school system, one that has good teachers and opportunities from elementary to high school will be very very valuable for your kids as they are growing up. For us, it was the biggest factor in where we moved and it worked out great. Good Luck!