I live in Sheffield and have done for all my adult life, since leaving university - some 21 years I think now.
Is it a nice place to live? And by that I mean is it relatively safe?
Its a lovely pace to live and it is very safe on the whole. Like all cities or big towns it can have issues, though these are pretty much constrained to certain areas. There isn't a city around the Uk without some issues after all. But it is a very friendly city, very family orientated with lots of green space and bordering on beautiful countryside too. We love living in Sheffield as does DD, now 15y but has lived here all her life.
Are there good schools?
There are a lot of good schools at both secondary and primary, and there are both state and independent options. Have a look at the Sheffield LEA league tables for data but there are many good and outstanding schools across the city.
I work in a local infant school. It is rated good on paper but also has been outstanding features and a school I'd have been very happy to send my own child too.
Is there plenty of things to do with kids? (Kids are 3 and 1)
Yes there are lots of things to do with children. There are many green areas and parks around and within the city, local city farms, museums, play centres, trampoline centres, high ropes, bigger farms/butterfly centres, etc. and more.
Nice churches?
Im not a church goer but know people who are. They go to a range of churches around the city and all seem very happy with their church choices and communities. Some of the church communities are very family orientated too.
Which are the recommended areas to live and any that should be avoided?
Generally the SW areas are deemed to be the most desirable areas, especially S10, S11 and S17. Much depends on what type of area you want - close to city, lots of amenities, quiet and rural, bustling, verge of countryside, etc. Lots to choose from.
There are some places I would avoid personally but again it is often personal requirements The house prices too tend to reflect this.