Ah, I can offer some suggestions because we have a large family when there are family get togethers (approx 50 people for the aunts / uncles / cousins / etc). So, basically how things work out for posing is pretty similar to what you suggested. Sorry if my thoughts are kind of all over, but I'm trying to think back to when I was doing the group shots last year
Put people into family groups, and put the tallest people at the back. While trying to get three rows is good, sometimes you can move people around to take up less room and still have everyone be seen. For example, the woman in the back row with the blue shirt. If she is with the man who is next to her (to the right), then you could easily stand her in front of him and both of them could still be seen. Often times you can put couples in front of each other rather than next to each other. The taller one can wrap his / her arms around the other one, and it takes up less room for cramped spaces. Most of the time they don't try to strangle each other
Try not to put anyone in front of the main person in the family. In this case, I'm guessing the older woman in the middle since you mentioned putting her in a chair in the middle for the next shot. It's good to have her in the middle since she is the center of the family. If there are people who are semi-short, you could put one behind either back side of the chair so that the grandmother (?) is centered between them. Preferably her kids behind her rather than grandchildren, but it depends on how you can set it up.
Have the tallest people holding their children if you can because it gets them slightly higher and you don't have to worry so much about the kids faces being covered.
If you move the camera down a bit, you don't need as much headroom and it will look less cut off for the people in the bottom row.
You should be able to see the Christmas tree if you get everyone set up right.
You might try planning it on paper a few different way since you already know who will be there, their heights, etc. You could just have the tree to the side.
It looks like you've got all the lighting setup, so really it's just a matter of planning out where people stand. It's a big group, but it shouldn't be too impossible with a little work. Good luck!
