For visiting Budapest with family it’s worth choosing a less busy neighborhood. Close to Hero’s Square might be a good option. It can be found in District VI (also known as Terézváros). Alternatively, staying on the Buda side near Castle District is also a good choice for families.
The inner part of District XIII, (known as Újlipótváros) is a less touristy and crowded part of the city. Try to find accommodation that is closer to Szent István boulevard.
This neighborhood is convenient for families because there are many parks and playgrounds. The main sights are accessible with public transport and Margaret island is also within walking distance.