Techincally all you need to do is kill goblin leaders - all other goblins are skippable, children especially so.
Personally I would be against full-on peaceful option - I think already BG3 has issue with amount of "valid" paths available and adding an optimal option C wouldn't help matters. Think of Outer Worlds, where I am willing to bet in most big quests most players went for C "make everyone happy" option.
I must say, I am not fan of how goblins are presented. They are monsters - making them relatable kinda kills the point of their existance - especially that there is little interesting done with them narrative wise.
