Current compact sedans are the size of midsize sedans from the 2000s. I remember 3 of us being jammed into a foxbody as a kid, a typical modern sedan is "fine." Assuming your kids aren't fat, or need to carry around much.
Unless you stretch the meaning of reliability or luxury, Lexus and Acura are all that's left. Most new luxury buyers / leasers treat cars as disposable and don't care about longevity.