My question then is for some perspective and any help/advice to tell our kids (7 and almost 3) in an appropriate way a)why nana and grandad are with other kids and won't visit us, b)why we won't go and see them or keep contact.
I am sure there are a number of perspectives here, but I will offer one as well. "No contact" is a tool for you to ensure your family's safety and sanity. It is something you and your spouse can discuss and agree upon. Children are very present-minded, paying close attention to what is in the present moment, and it may not be necessary to give many details about the circumstances. If they ask, a gentle acknowledgement of the absence may be warranted, without much detail. As they grow, and circumstances evolve, it may be appropriate to discuss; however, I think that they will follow the lead of you and your spouse, which sounds rational and considered.