Wow - you've got a huge problem and some really ingrained habits. The biggest problem is your husband who has taught them that a TV is the way to go to sleep. Now they are really unable to calm down and to self-soothe. I'm glad you know that a 4 year old has to be asleep before 10 PM and I think you and your husband need to educate yourselves about the long term negative health effects for kids who are sleep-deprived. My concerns include them being in school and unable to learn/focus, and their future ability to do homework with a TV in their room. That is an educational and health nightmare. A CD of lullabies is one thing - but the visual stimulation of a TV and the onslaught of sounds is not conducive to good sleep.
Standing over a child for an hour is not helpful. I know you feel desperate but you just can't do that. By 4, a lot of kids give up naps so maybe she needs to do that in order to sleep at night.
Kids have to learn to calm down, and for many it's a learned skill. That means that you may need to take a long weekend (Columbus Day is coming up - that might work), and just shift entirely to a new routine, with no exceptions. Everyone will be exhausted and cranky but don't give up. Take the TV out of the bedroom. You can't explain it to a 2 year old but she'll be easier to retrain. You can't really explain it too well to the 4 year old either. But there has to be NO getting up at night (no walking around, no getting water, no questions, etc.). You can leave a light on in the bathroom for the 4 year old but if that's too tempting, then put the kiddie potty in her room along with a set of wipes, and leave it at that.
Everyone wakes up at night but most of us can put ourselves back to sleep. Your kids can get to sleep, and they can't put themselves back to sleep in the middle of the night.
You have to have some rules about coming out of the room - maybe it's not until "it's light out" or not until a special kids' clock says a certain time. If you have a nightlight on a timer or a sun-sensor, then they don't come out of bed until that light goes off. (Or there are light-up clocks for kids - don't come out until it lights up.)
There are no real tricks, I'm afraid. You can put a white noise machine in to drown out the outside sounds (use an allergy air filter, a fan pointed away from them, anything) but it has to be a constant sound, not dialog or music or sound effects from a movie.
I agree with you that drugging the kids is not the answer. First of all, most of these products are not regulated and you don't know what's in them. More important, the kids do not have sleep disorders or stress - they have really bad habits. We all do stuff to achieve the short term goal, and later we wish we hadn't. My kid was a terrible sleeper and at 6 months was still up 2 times per night. But the pediatrician put her foot down and said we all needed sleep. She advised the 3 day weekend thing and it worked great. It was 3 days/nights of hell followed by blissful nights. You go in and comfort the child but no hugging, no picking up, no talking beyond "It's time for sleep. Night night. See you tomorrow." You can rub their heads for 15 seconds while you say the words, but then you leave. You do not go in for 15 minutes no matter what. Then you go in and repeat, then you leave for 20 or 25 minutes. Same thing repeated as much as possible with longer and longer intervals. When they figure out there is no water, no singing, no TV, no hugging, no drinks, no nothing, they eventually collapse and go to sleep. If they wake up in 4 hours, you do the same thing again. It's awful but otherwise you will be dealing with severe problems, sleep deprivation and behavioral issues for the next 15 years.
I'm not sure I'd introduce a new calming item if you think it will turn into an activity. Instead, I'd use something they already have that is their favorite comfort item - blankie, stuffed animal, etc. They pick one thing, and that's it.
Good luck! Don't give up!