OK, a thought...

I know that some vet offices offer getting these cap things glued onto the cats nails. They have to be replaced at some point, not sure how often.. and someone once told me that you can buy them at pet smart too; and you have to apply them. Though I am not sure how true that is. At least that would stop the cat from being able to scratch everyone to pieces. I think that this is due to age. Unfortunately, there may come a time you have to make the decision on euthanising this cat for his good and the good of your children. I have have had many animals over the years, and a few times have had to have old cats euthanised due to the same things you are experiencing.