R.K.
This seems to be a common problem in the city, to tell you the truth. We have the exact same issues (have 2 kids and a cat in a condo on teh 3rd floor with wood floors). It is unreasonable for your neighbors to expect that your children should stay confined in their rooms most of the time and it seems to me that your family is going out of your way to be good neighbors.
Maybe I'm harsh, but I think that your attempt to come downstairs and talk about the issues are enough. They need to be understanding as well. Don't feel guilty for tryly living in your home (you paid for it!)