Try ask at Penang airport if they can help you check-in luggage all the way to Bali. Then you no need collect and re-checkin the luggage. But at least keep 1 set of clothes in hand-carry, in case you arrive to Bali, but luggage still in LCCT KUL

Yes, ask wife queue first if she is alright type Later spoil holiday mood

If AA all the way, it may be possible. I never travel AA from Pg with transit connection. You have to ask at check-in counter there.

If you already web-checkin, then is just 60 minutes before to check-in luggage. i.e. 5:45am.
Therefore, I suggest to reach LCCT around 5:30am, which means, take the 4:30am bus (around 45 minutes only in early morning speeding) with some leeway.
Means ... reach KL Sentral (if you take Skybus) at 4:15am, depends what time you need to wake up and go there.

I do prebook meals. The last time I saw, those who didn't prebook, was like fighting for food from air-steward/dress.
More like a shouting auction and everyone demands to pay for the last few cups of maggi-cup noodles. It was a KUL-MEL flight around 8-9 hours. It was so ... messy.
I was lucky to be enjoying my food (prebook is served first), while the rest were flagging their cash around to attract attention to place order.

My advise is always plan ahead. If the flight is longer than 3-4 hours, check the flight times if it cross over breakfast/lunch/dinner.

I can't. Too hungry for me. Settle my own stomach first

Located normally inside departure hall (on your flight home). Sometimes is before/after immigration.

May not be issue if travel within Malaysia, Indonesia, Singapore, etc.
But some countries may not recognise it (on your flight home)
For me, I'll get it sorted out properly to have a peace of mind.

Holiday period, bla bla bla, even already web-checkin, try to be there at least 1.5-2.0 hours earlier.
You don't want to run around like headless chicken, or sweat like a turkey if the baggage check in queue is very long.
Once done, just go have a cup of coffee/tea or just relax a bit.

... and when they missed the flight or barred from check-in/boarding ... they cry/jump/roll around like a small kid

What document verification ? You mean passport ? Normal procedure when reach airport (for departure) is:
1) web check-in earlier or check-in at counter to get boarding pass.
2) check-in luggage or drop-off (and pay penalty if exceed or whatever, at different cashier counter)
3) walk to immigration to verify passport.
4) pass-by Customs (if any) for declaration
5) now you should be inside already
6) some will have cordoned off boarding gate, remember to be here at least 30 minutes before actual flight time.
7) board airplane.

There will be several times of x-ray scan.

If it's same AA to AA, you need to ask at the counter when you drop off the luggage.
Domestic-domestic ?
Domestic-international ?

Remember to bring a set of clothes in hand-carry, as there are chances of luggage delay, missed, lost.

We are not working for Air Asia, nor decision maker. The best is for you to call/email Air Asia customer support/hotline to inquire directly.

What if I tell you ... yes, you can change. Do you believe me ? What if later AA says you can't change, will you me ?

No one can guarantee you on weather, not even God/non-God (atheist)

Even if they tell you no problem on weather, your flight take off, 15 minute later, heavy smoke come, and airport close airport for landing, how ?

I recall KUL-HKG CX are using 777
If manage to get front seats like rows 4-5, the seats are like old-business class type. Quite wide and long leg space.