Hi, i live in Beijing rather than Shanghai, but it's still China obv lol!! I've been here about 4 months now and so far so good. I've not been to Shanghai but i would imagine it's pretty similar to Beijing in terms of the expat community which is excellent (i also get the impression the shopping is better and there's an M&S i believe)! I live on an expat compound towards the outskirts of the city but here in Beijing there also many expat apartment buildings in the city too, it really depends on what you would want for your family. There are also lots of excellent international schools some of which follow the National Curriculum but they are pricey so you do need to make sure the school fees are included in your DH's package. My 2 children are both preschool age but they go to school in the mornings and the school they are at, is brilliant, i almost wish they were older so they got to take part in the all the out of school activities and opportunuties the older ones get! In fact, i wouldn't mind going back to school myself!
I've met loads of people of all nationalities - from the compound, the wives of DH's work colleagues and from the school and the community spirit is great because everyone is in the same position everyone tends to support each other.
Food shopping, there is a chain of shops that specifically target the expat community and sell imported food mainly from the US and Australia. It is a LOT more expensive and this is something you will have to come to accept if you want to continue to follow your Western diet, which tbh i do.
I would also imagine you would have a driver to drive you around as you have to have a Chinese driving licence to drive over here and tbh i'm not sure you would want to!! Most people (including myself) have an ayi (like a housekeeper) to come in either full time or part time to clean the house, look after the children etc. Mine comes and cleans every day as Beijing is very dusty as it's so dry and the floors get filthy. Plus no more ironing for me - yay!!!
Financially, it does look good on paper but expect the first few months to be a lot of expense. A lot of my friends all arrived at the same time as me and we've all said that we expected to save and as yet we're actually dipping into savings. I think the cost of food is part of that and then our heating bill is shockingly high as our heating system is ridiculously inefficient.
I would say it's a great adventure. It is incredibly frustrating sometimes when you can't properly communicate and you can't read any signs etc and you do have your down days but that comes with living abroad. I think it's only natural to have wobbles as it's a huge step, especially when you have children.
If you don't want to be a lady that lunches there are generally many different activities that you could get involved in or you could take up a new sport or hobby. I'd actually quite like to be a lady that lunches but i have to be back at lunch time for the school bus!!
Obvioulsy this is my experience of Beijing but i would imagine it would be fairly similar to Shanghai. Are you coming out on a look-see at all? I would definately try to push for one if it's not been mentioned yet as it is invaluable as you'll be able to check out housing and schools as well as get a feel for the city.
I've just realised i've majorly waffled on, so sorry 
so i hope it's of some use to you and let me know how you get on.