When I was in 2nd grade, our teacher dissected a piglet in class at the end of our unit on organs of the body so we all could see a heart, kidneys, the brain, etc. She cooked different organs and allowed us to try them if we wanted to. She showed us the vitreous humor in the eyeball, etc. Obviously, as I am still talking about it...it made a huge impression, we were fascinated. The cartoon pictures of human organs we had been shown in the books had nothing on looking at real organs. It was, in my opinion, a GREAT lesson.
Kids are far stronger than we give them credit for. Those children eat meat, learning where it comes from will either be a lifelong lesson they remember well...or they'll become vegetarians, lol. The bottom line is, they came to you to find out what you were doing...and you told them without trying to scare them or make it into more than what it was. You were completely within your rights to do so.
That being said, when the parents came to you and asked you not to teach their children things...in my opinion again, you should have said that, in the future, you would tell the children to return to their parents if you were doing something that involved guns or dressing animals. They are the parents, they have the right to raise their children how they see fit. Additionally, however, you'd be right to say, If your children come over to see what I am doing I am not going to hide my actions. I will however, direct them back to you.
You should not have to curtail a legal, harmless action on your own property. But you should respect their parental authority if they have asked you not to teach their children about certain topics.
All that being said - I bet the kids are going to remember your lesson forever. As a non-hunter, I would have been interested to hear it too!