Some thoughts: When I was a child, many years ago, we lived on military bases. There was an incident where a little boy, eight or nine, was really getting aggressive, tried to play sex games, "doctor," inappropriate stuff with several little girls in the neighborhood, five or six year olds. Stuff that sounds similar to what you describe.
It came out, there was much hollering and yelling, threats and anger, but it never went official or went to the police. Did the little girls stop playing outside because this little boy was still in the neighborhood? No. Did the little girls parents request that the boy be kept away from them at the elementary school? No. (I know this because my parents were school administrators) They were prohibited from going around or into the supply buildings, where the incidents had occurred, of course, or from having any contact with this little boy, in other words, go in the opposite direction if you see him coming.
And then the incident was over. Nobody moved. Nobody's life was ruined, no one was traumatized forever. It was not the proper thing that should have happened, perhaps, this was years ago when things were handled very differently. But the point is, no one was lifetime traumatized. It could have been really bad, but it wasn't. It came out and was stopped before anything truly horrible had happened. Thankfully.
And I know many times, the horrible things happened.
But the point is, it sounds like this incident you describe has happened some time ago. Your children are older now. You are the one who keeps reliving this incident and reminding them they have been molested, who did it, how much power this incident had over you all and how terribly your family has been treated.
If you can't move, live there happily and productively. Choose not to be the on-going harrassed victims of what you perceive as the failure of the system to do what YOU think would be appropriate.
Incidentally, what do you think the school should do in terms of keeping children who are probably in different grades from having any contact with each other? I can't visualize what you think would be an appropriate way for this to be handled by a school.
You can think of some wonderful games for your children to play indoors, opportunities for them to get out and have playtime. You don't have to let them join the herd of unsupervised children who are usually out playing on the playgrounds at housing of this type, but you don't have to let them feel that they are different or damaged or their lives are ruined. You have to demonstrate to them good coping skills for the bad things that sometimes have happened to them, not run around keeping this situation alive months after it occurred when everyone else is giving you overwhelming signals that it needs to end.
It is very true that this child who did the molesting may be the subject of an investigation. It is very true that when something like this happens, the child who instigates it usually has been taught the behaviors somewhere. The authorities certainly would not be telling you about it or keeping you appraised of what they have found. This other family may move away soon. They're not your issue any more. Moving away or moving on, those are your choices. You probably could get therapy for yourself and your daughters that would help more than talking to any more attorneys who don't think you have a case.