6 or 7 megapixels should be fine. I have a 16x20 hanging in my house that was taken with a 5 megapixel point and shoot. Since you are shooting outdoors, it shouldn't be too much of a problem. Make sure the sun is at your back so that everyone has light on them and there aren't any shadows. You can try it on automatic, and you can try other settings too, after all, it doesn't cost you anything and the bad ones you can just delete. Once you have the photo you like, you can upload it to Costco or Walmart and they do a really good job with prints for a very reasonable price.
One thing you might want to do is to grab someone (wife, neighbor, kid, dog, etc) and experiment with the camera so you know how it will look before you make the shot you want. This will give you a good chance to see what works best with the camera you have and you will be better prepared when you have everyone together. That will save you a lot of trouble because children are a big challenge to photograph as they get antsy fast.
Any other questions, feel free to ask.