It sounds like you might be doing a fair bit of in-town driving, despite your higher mileage. Taking that into consideration, I think the Prius would be a great choice. The all-gas cars will have lower efficiency with stop and go driving, while the Prius makes better use of the electric motor under those conditions. It's also a little roomier, so would be good with the kids.
I had an '09 Fit, and it averaged about 39 mpg when I had a freeway commute, but honestly I found it a little bit tinny & flimsy (and I'm not small car averse, I drive a Honda CR-Z currently). Cargo room in the Fit is amazing though, since the rear seats fold both up and down. You might check into a hybrid Civic, too.