I saw it when I was a kid. With the remarkable Georgia Brown as Nancy. The show is very moving, and nearly tragic. And I loved it.
I think the sunniness of the movie version need not be a strict guideline. The story is about criminals and people who are trapped, with the brief reprieves in some songs (eg., who will buy), and salvation for Oliver himself.
Kids can deal with that.
There was a brilliant behemoth of a set that revolved and unified everything.