Similar situation here: Two kids, aged 5 and 3, wife a JW. Kids go to meetings maybe once every three weeks. No graces but usually a bedtime prayer for the kids.
The last time my wife and I had a discussion about religious education, it was because she didn't like me telling our son about reincarnation that some people believe in. He likes the JW idea of paradise earth very much and I was trying to tell him (rather awkwardly and unsuccessfully) that this is not a fact but just some belief and other people believe other things.
I like your indirect approach: show them the stars and the dinosaurs. Also try to offer them as many possibilities to do non-JW activities and make non-JW friends as possible. When I tell my son that some believe this and others believe that, and you will figure out what to believe yourself one day, he doesn't quite understand. But he gets it, when I tell him Grandma thinks she will go to (catholic) heaven when she dies. Or that his kindergarden-friend doesn't eat pork because an old book (and his parents) say so. People are different, people can believe and do different things. That doesn't mean they are bad people.
In general I am not too concerned. I mean normal 5-year-olds believe in Santa Claus and the tooth fairy, too. And nobody is afraid that as adults they will still wait for Santa to bring the presents. I did put up some rules about JW-topics in the house though. For example no talking about Armageddon or that Daddy won't be in paradise with us. And no door-to-door with the kids. So far we as a family are doing ok. But I am always suspicious and ready to jump into action when I get the impression that someone is trying to influence others through fear and guilt (my wife on our kids, or other JWs on my wife).
Fortunately JW life isn't very attractive to children (except for Caleb and Sofia). Boring meetings, no sunday school, no birthdays, too many stupid rules. That makes it easy for the non-JW parent to offer different activities (if you have the time of course).
btw here is a link to my thread from 2 years ago about the same topic: http://www.jehovahs-witness.com/topic/279456/raising-kids-jw-mother-agnostic-father