I'm working as a sysadmin for a local government institution and as part of my job, I need to manage the hardware for a local elementary school. I was wondering about the possibilities of a safer Youtube environment for kids as well.
We tried the native YoutubeKids but it's way too strict with its filters and was deemed not usable for educational purposes. So we just let the kids use Youtube in its normal way and ask the teachers to monitor their video watching behaviour. So far, no other alternatives have come up for us.
Sorry if that doesn't help you exactly but I just wanted to let you know that we're in the exact same boat.