My 20 yr old daughter (yep, I'm old) had to have an IPad, obsessed over it for a few weeks, I refused to spend $700.00 on an IPad when I just got both of my kids amazing laptops less than a year ago. She pulled the trigger and bought it herself, after a week, she realized that it was a lot of hype, that she didn't need an IPad, she just returned it, ordered a Kindle Fire HD and saved several hundred dollars.
In this day and age, I am sure that your 5 yrs old will know the difference right away, but the big selling points for IPads to kids are all of the apps that they can play with and the music that they can download at a premium through apple.
In my opinion, $700.00 to play games and listen to music on a 9 inch screen would be better spent buying a real good laptop, you will get much better bang for your buck.