I am sorry to hear of your loss, OP.
I haven't read the whole thread.
My neighbour died suddenly when ds was 3 months old, I had no-one to look after him so took him, he gurgled, cried, I bfd him, it was lovely. I lost count of the number of people who came to me afterwards to exclaim how nice it was to have a baby at a funeral for various reasons, life continues and we must celebrate, and a good distraction too. We don't have to be sad.
One week later and my FIL died suddenly- a massive shock. Our older children were 7 & 4. He died away from home at work, and finally came home 2 days later. The funeral director brough his coffin in the dining room (open plan with the kitchen and livingroom) and he lay on the kitchen table. We left the room while MIL stayed with dh and coffin was opened. BIL and SIL then went through, then me and kids and few close relatives. It was for me the first of lots of experiences and although I was petrified it was absolutely the right thing to do, for us. I did wonder how the dcs would cope with it (we had chatted lots previously and all made the decision together, not lightly), and they were absolutely brilliant. For themselves, and for us and for MIL. After a few hours it became "normal" and we all just milled around. Rather surreal but there was no alternative, in our eyes. We both (dh and I) wanted the children at FILs service, which was a cremation. Our first experience of cremation. Our nephew was also there, aged 1. It was a nice distraction. We held a service in the house first then a 70 mile journey to the crematorium. The dcs were very close to their papa and for us we couldn't imagine leaving them out. The dcs were absolutely devastated but coped extremely well with the whole situation. To us it was right because we want them to be able to deal with as much as possible and we thought that hiding it just made it taboo.
However it is very much a personal choice and the decision shoul dbe made on how the child will (likely) deal with it and only you know your child well enough. It's amazing how natural they find it when we allow it to be so. Because in my eyes, it is, and this helps me.
You are right to be cautious, but you will know what is right for you. As someone said it needn't be more distressing than a church service.
For our service, gates closed around FIL's coffin. This was the upsetting part- I liken the feeling to when a coffin is lowered, the most upsetting for me. But you can probably choose this. A friend also lead the services which also made it very personal.
Good luck in your decision, and I wish you lots of luck for sailing through it. HTH.