We did a luau last month at the Sheraton on the Big Island. It was my first one in quite some time. My teenage kids really wanted to do it.
There were a lot of families with children at this event, but not any toddlers. The age group most represented was about 6 -12. The luau did a great job of catering to them. There were some craft activities before dinner and then during the show, they asked all the kids to move up to the front of stage area so they would be more engaged.
The Sheraton luau was pretty small by luau standards. It was set up on a large grassy area of the hotel known as the "luau lawn". The tables were nicely spaced apart, and if one was seated at the back of the seating area, there was plenty of lawn area to run around on.
If bringing a very young child, I would look for a smaller luau that doesn't cram everyone together at long tables and that is set up in an expansive area with lots of nearby diversions. I wouldn't sit anywhere near the front, because during the long evening you will be getting up and down a lot with a toddler.
Most luaus don't charge for children under the age of three. Why? The child will hardly eat anything and nothing at the event is geared to their interests.