Alan - my daughter (when around the same age as Merle) had a similar appreciation of the old film about the Titanic, "A Night to Remember" compared with the then new film "Titanic". I'm sure you're right - children recognize and respond to good acting when they see it. Although she maybe wouldn't want to admit to it now, she fell in love with Kenneth More in that film and was so excited when we came across a display of Kenneth More memorabilia in the foyer at the theatre named after him in Ilford.
I personally see nothing wrong in re-makes - some turn out better and some worse than earlier versions, and some are just different. After all, this is what is happening all the time in live theatre, where it is always interesting to see a different director's "take" on a play, its scenes and characters.