NE corner of Parmer and 1431... but notice the date of the article. The construction has been either super super slowed or delayed completely. I know as of a couple of months ago, there were questions on whether the thing was going to be built after all.
As for the original question... 2, 3 and 5 might be too young. I don't know if it's worth paying all of that money to stay in the kiddy areas all day. Maybe wait a couple of years until you can actual go on a variety of rides.
And once upon a time, Schlitterbahn was the place for the mom's to display their newly purchased boobs... and the life guards were usually quite attractive as well. Have only been twice in the past 6, 7 years though so can't say if it still holds true.