I prefer Storyline A, as it doesn't seem as believable that a baby and kids would be sent to The Rooms. Plus you could have more potential for information being discovered and a stronger plot with older main characters.
In Storyline A, I'm not really sure what the dogs have to do with things. But maybe the girl has a dog and is threatened with having her dog turned into a killer. I wouldn't throw in superpowers as that has been pretty overdone recently.