The SPDIF part is really restricting your choice and raising the cost - are you convinced there's no way round that part of the requirement? Normally these days the workflow is record to memory card, pop that in your PC, edit with the software of your choice (even something free like Audacity). For the purpose you describe I would have thought a Zoom H2 would be perfectly adequate (and if placed between the front seats would record you in the front on the front mics and the kids in the back on the rear mics).
I last did this about 30 years ago using a portable JVC cassette recorder with Super ANRS NR, and a binaural mic I made from Radio Shack capsules, a wooden disc with broomstick pole piece running through it, and a couple of sieves either side for windshielding. And I still have the result (and grandchildren!). I took my kids across the Thames ferry at Woolwich in London, and all you hear on the recording is my daughter saying "Dad, I wanna go inna water!". "No, darling, you would drown or get very cold". Silence for about 15 seconds. "Dad, I wanna go inna water!". Repeat as if on a loop for the whole trip....
I have to agree with Ozpeter that the s/pdif output requirement is a bit limiting. How about this workflow:
-Buy any handheld recorder, not worrying about s/pdif output
-Copy audio file from recorder's memory card to desktop/laptop computer
-Open file in itunes and burn all relevant audio files to a redbook audio CD
-Insert redbook audio CD into masterlink and import from disc onto masterlink's hard disc
Kind of a pain, but probably quicker than real time transfers? You could also use a re-writable CD so that you didn't keep wasting discs just for this workflow.
You may also consider the older Edirol R-09 which has an optical SPDIF output, internal mics, is hand-held and inexpensive (used or possibly new old stock). It would seem a perfect match for this application. You should be aware that the digital output has been eliminated on the newer R-09HR version which has replaced it over the past year.
Agreed that computer x-fer is probably faster, but I won't argue the workflow.