But there's all this stuff I don't KNOW...like, you know, HOW TO FUCKING ACT. Or direct. Or buildsetsmakesoundeffectspaintblock....argh.
Well, others have already said most of what I'd say, I guess - but fwiw, I've acted in R & J when I was in Canada at High School (I was the Nurse) & directed the Queen Mab scene; I'm running an after school drama club at the moment, and I'm presently acting in a short 1930s comedy in the Bangkok Community Theatre's fringe production. And I've acted in other Shakespeare & directed other plays, some with kids.
And I agree - I think you'll enjoy it immensely, and I think your instincts for directing and blocking are going to be v. sound.
I'd like to be constructive - what specifically are you worried about?
Do you have anyone who has any experience (adults or kids) with the technical side of staging a production? I'd be tempted to start off by sitting down with the kids and identifying specifically what all the backstage jobs involve and getting your stage crew sorted out, because it sounds like that's the bit you're daunted by - they may already have experience and/or transferable skills that they can bring to the table. (When I was in R & J our drama teacher/director made 3 of us into co-directors and we each took responsibilty for directing individual scenes, which she oversaw - it spread her workload a bit, while giving us experience in directing and making us reflect on our own performances too...) Plus if you have a bossy and anal and efficient responsible kid to be the Stage Manager, that's going to make life one hell of a lot easier.
(I'd second the "Go modern dress! Choose modern dress!" thing, incidentally, but YMMV.)
For my money, the most important thing, far and away, is that they understand what they're saying and mean it, and that you've got the blocking worked out - and that's going to come naturally, to some extent, when they know what they're saying and what the emotion of the scene is.
When I'm planning something I like to work out what areas I'm going to need for my stage, in terms of basic props/levels and where people are entering and exiting. I tend to work it out with a pad and a pencil, scribbling cryptic-looking, make-sense-only-to-me maps of how people will move about the stage and get on and off.
If you want to have proper set changes, then maybe sit down with the script and try to group scenes into locations so you know how many different looks you're going to need to create, and then decide how you can make the scene changes simple - you'll need something to represent Juliet's bed/tomb, you'll need some way of presenting the split level for the balcony scene, you'll could probably use chairs several times, but you don't have to have them...if you want to go with a very simple set, with a black curtain and blocks or something, you could do that. Or not. Do you have a particular idea of the 'look' you want to aim for?