We bought this for our kids, ages 4 and 7, and they love it. They've watched it countless times, I catch them singing bits and pieces of the songs in the car and, because the songs are pop songs from the 80s, 90s and today, there's something in there for parents to enjoy, too.
The story is simple enough--a struggling theatrical producer launches a talent show to increase business for the theater, and his receptionist accidentally puts a few too many zeros on the grand prize amount, which attracts everyone from miles around to compete. The range of music runs the gamut from pop to rock to even a couple classic Frank Sinatry/Rat Pack tunes from the 50s. I can only think of one scene that could be considered inappropriate for kids, when these three girls are singing the opening lines to "Baby Got Back" (they repeat "oh my gosh, look at her butt"). As long as you don't think your kids won't latch on to that and sing it at the most inopportune time, the movie is otherwise completely safe for kids of all ages. No cursing, no violence, and no sexual innuendo, real or implied.
Perhaps the best result of all is that both my boys are now much more interested in music. They're interested in playing with my electronic keyboard, and I hear them actually trying to sing in the car now. Even though my wife and I have exposed them to music since before they were born, they didn't take much interest in singing or playing music until they watched this movie. So who knows, maybe this will unleash the musician in your child, too.