Thank you for teaching children! I find it to be one of the best ways to get better at teaching the Bible. If you can teach kids, you will be better at teaching adults!
There are a couple of questions here. Number 1, how do we explain sections of the OT to kids, Number 2, how do we explain sections of the OT to agnostic/atheist friends? These are good questions and I do think that there is something to the whole idea of speaking differently to different audiences. With that said, here are some thoughts I have on your question.
First, when it comes to kids, I agree that adjusting the content of what you say is completely ok. It’s the reason we have kid-friendly TV versus teen shows and adult shows. There are certain things that are age appropriate. With that said, I do not know the age of the children that you are teaching, so I will leave it up to your discretion whether or not you should share the full details of this story, but what I will do is give you some more information about this situation and allow you to adapt it to children/adults as you see fit.
When it comes to the Old Testament, one must be prepared to do a little research for the simple fact that the OT culture is so different from ours. Reading it can leave us in a tricky situation since we generally, unintentionally, read it through 2018 eyes. The OT cannot be treated like that. We need to read passages before and after questionable verses, but we also must read the OT in light of all the books of the Bible as many of the stories speak to larger narratives and themes that are happening from beginning to end. The specific passage you raise is interesting because it makes people wonder why would God want people to die? All they were doing was believing in other gods? Your observation about this not feeling right in our pluralistic society is spot on. This is a question that we ask today. It certainly is not one they would have asked then. No one then found God unfair for punishing sin no matter which religion they were. In fact, one possible idea as to why Jezebel was killing the prophets of the Lord in 1 Kings 18:13 was because she thought that it would please Baal and he would in turn end the drought! The idea of a drought being the cause of human sin, failure, disobedience, evil was very common, same with famine and disease etc. So, people at that time wouldn’t struggle with the Baal prophets being killed for being false prophets in the same way people today would see it.
Secondly, let’s take a look a bit further into these prophets. Baal’s prophets were leading people to follow a false god, Baal. That may sound trivial for today, but think it through a bit. These were people who were negatively impacting people’s eternity. Directing them away from experiencing the real God! People were following them right into hell. That is serious! Who knows what kind of sacrifices or offerings they were encouraging people to do to this false god! People weren’t opposed to serving the true God, as evidenced by the fact that once they saw the fire fall on Elijah’s sacrifice, they immediately fell prostrated and cried, “The Lord—he is God! The Lord—He is God!” (v. 18:39). So they were open to the truth, but were not taught it by the false prophets. If Elijah hadn’t come along, what would have happened to their knowledge of the true God? Idolatry and blasphemy were serious sins which brought with them punishment of death even for the Jews (Exodus 22:20, and Leviticus 24:13-16).
Thirdly, knowing that the character of God is good is essential for every Christian. If you don’t have confidence through life experiences, or through reading the Biblical text that God is perfectly good, then there are many passages that will trouble you. You probably remember the story in Genesis 18 where Abraham is asking God not to reign down punishment on Sodom and Gomorrah? Abraham pleaded with God, not for the unrighteous people, but for the righteous that were in that area. And he said something very interesting in verse 24-25: "Suppose there are fifty righteous within the city. Will you then sweep away the place and not spare it for the fifty righteous who are in it? Far be it from you to do such a thing—to kill the righteous with the wicked, treating the righteous and the wicked alike. Far be it from you! Will not the Judge of all the earth do right?” (NIV). Abraham also had the expectation that God would do right- meaning that judgment should fall on the unrighteous and not the righteous. I think Abraham’s mindset is helpful for us.
God hates sin so much that He punishes people with death for it. Rom. 6:23 tells us that the penalty for sin is death. That means spiritual death (broken relationship with God), and physical death regardless of how that occurs. So, if I was speaking to kids or adults, Christian or non, I would focus on the fact that God punished people severely for sinning and worshiping other gods. While our culture doesn’t see worshiping false gods as all that bad (as long as you are a “good” person), it doesn’t mean that God sees things the same way. God hates it when we do things that are wrong. God hates it when we live in a way that is contrary to how He desires us to. In fact, God hates it so much that He penalized Jesus for sin. The problem is that in our society, we don’t always see things as wrong as God does. Pre-marital sex? No big deal. To God it is serious. Lying? No big deal. To God it is serious. Gossip? No big deal. To God it is serious. In other words, God takes our sin very seriously and that is what makes us even more grateful for the cross. Jesus steps in to pay the penalty for our sins. Part of the reason people have a hard time grasping the idea of God punishing sin is because we like to only speak of the Christian God as a “God of love”. But if we say that and don’t go on to explain further, then it brings further confusion to other Biblical truths. This is why people have a hard time understanding the idea of Hell, or why they ask the question couldn’t God just forgive humanity for doing wrong? Why send Jesus to die when He could have just forgiven people? If God is only about love, then the answers to this are weak, but love is only a partial description or at least it needs to be further qualified to explain that love carries with it judgment, wrath against evil etc.
I know it’s a long answer, but it’s a big question. I hope that helps in some way!