Yeah, I read that the two children were the reincarnations of Misuzu and Yukito. Also, you do see the to children at some point during the show, Misuzu waves to them one time when they are on the beach (other than at the ending I mean)
I'm not sure which episode it is though, I'll sift through them and tell you later.
EDIT: Found it. The beginning of episode 10 just after the opening
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