How "real" do you think picture books should get?

Based on my last three manuscripts, which also happen to be my first three for kids ages 5-6 (my others are for babies and toddlers), I've come to the tentative conclusion that I am incapable of writing fluff for this age group. I began each of these manuscripts intending them to be light-hearted, humorous, and cute... and all three of them ended up addressing the issue of fear in different ways. They're still humorous and at times cute, but... well, apparently in my world, the monsters in the dark are real, daddies really do go off to war, and even kids can get into car accidents.

However, in the end, my characters are always safe and loved (even if their lives aren't suddenly filled with puppies and roses) and my child audience will have learned new ways to identify, express, and cope with their emotions. I think those are the important parts, and they're essential to what makes these three books work (along with the humor). Will my books sell? Yes, I think so (or else I'd scrap or revise, duh). Actually, I think kids will love my books. Counselors sure will. But I do expect some nasty backlash from adults that are firmly entrenched in the "shield your kids from reality for as long as possible" camp. (I haven't even published the darn things yet, and it has already started.)

Besides my recent work, some of this month's press on Maurice Sendak (see "Children's Authors Who Broke the Rules" and "On the Phone with Maurice Sendak") begs the questions:

• Where do you draw the line about what's too harsh to put in a picture book?
  
• What techniques do you think work best for picture book writers to "soften" harsh subject matter?

Maurice Sendak:

Quote :

I would say that touch of reality in a child’s life is a child’s comfort. The child gets the sense that this person who wrote this book knows about me and knows the world can be a troubling, incomprehensible place.

From "On the Phone with Maurice Sendak"

My best friend:

Quote :

You wrote about a kid getting in a car accident because a gremlin[1] ate his tires? No, no, no, no! You can't write that! That's like something out of the Twilight Zone! Haven't you seen that movie[2]? It's terrifying!

[1] In my defense, the gremlin in question is a very cute baby gremlin who likes to chew on rubber... and batteries... and video games...
[2] I haven't, actually. But I am well aware of the movie - and the c1920-1940 military folklore upon which my gremlin is based. Seriously, people, gremlins get a bad rap. It's not like we're talking red caps here.[3]
[3] Red cap: a VERY nasty fairy that keeps his cap red by bathing it in... nevermind. I can't win this argument. You'll just have to read the book. It's cute, I swear.