Is ILR really required for outside-UK born kid

Hello All,

I would request input of the forum gurus on the process of Naturalization for my Kids.
My Situation : I am on Tier 1 general Migrant Visa and have 3 dependents. ( Spouse + 2 Kids) . For All 4 of us Current Leave expires in April 2016
I entered UK on Oct 2010 and would be eligible for ILR in Oct 2015 . I would be going for PEO appointment first for only me and hope to have my ILR completed by Nov 2015.
My Wife and 1 kid ( now 5 years old , born outside UK) got there PBS dependent Visa in March 2011 and entered UK in May 2011.
My second kid ( now 3 years old) was born in UK and got her PBS dependent Visa after her birth in March 2012.

Now the queries:
1. For my Kid born in UK , I know that I don’t need an ILR for her and I can apply for her BC Registration /Passport directly after my ILR in Oct 2015.
2. I would not need to Attach My ORIGINAL Passport with My UK born Kid's Registration/Passport Application and a Photocopy of my ILR should be sufficient.

For my Kids born outside UK :
1.My Original Plan was to apply for my Wife and the kids ILR in Nov 2015 after I get my ILR in Oct 2015-03-11. After seeing the Massive increase in ILR fees I am wondering if I can avoid getting ILR for my Kid.
2.Can I Apply for my India born Kid Citizenship Directly after my ILR in Oct 2015 . As mentioned earlier , He has a Valid PBS dependent status till April 2016.
3.I have read at few Forum discussions that the citizenship application for Kids there is some discretion for case worker and Leave status of both Parents are checked.
4.I would like to know , Will it not be fine if I get my ILR in Oct 2015 , My Wife gets ILR in Nov 2015 and then when both of us have our ILR , I apply for my India born kid citizenship application in Dec 2015.


Looking forward to forums help.
Cheers
Anand