Since you are getting a good deal of shade I would recommend tall fescue. There are some shade tolerant KBG cultivars (America, Orfeo), and you can try those if you like, but with only a couple hours of direct sun it probably won't be enough for KBG. You could also mix in about ten percent shade tolerant KBG with tall fescue if you want. Since you also have some wear issues, it would be a good idea to select a cultivar that is wear tolerant. Luckily NTEP runs trials, and the latest tall fescue trials have a shade trial, as well as a traffic stress trial ( http://www.ntep.org/data/tf06/tf06_09-9/tf06_09-9.pdf ). So probably the best way to go about picking a few varieties of tall fescue would be to first look at the best cultivars in the Northeast region (especially the NJ area). Then look and see where the top ten in that regional trial fall in the shade trial, and the traffic stress trial. After cross referencing the three trials you should come up with 3-5 cultivars that will be the best for your situation. Hopefully you will be able to select one of the newer cultivars that have some rhizome activity (Firecracker LS, Titanium LS, Syder LS, any of the SRP varieties like Rhambler, and some others). These varieties tiller very vigorously, and supposedly offer some spreading ability, but the jury is still out on that. If you choose to take the easy way out and buy your seed at Home Depot I would stick with Pennington's tall fescue mix. I have looked at what they are offering this season and Pennington's blend is by far the best of the three or four brands they carry. Now soil prep is a huge part of having a successful lawn. While tilling can lead to some uneveness, and some would argue you are upsetting the microbial and fungal balance of the soil, I think it's better to have loose soil when establishing a lawn. If it was me, I would till the top 4-6 inches, rake with either a thatch rake or landscapers rake to remove rocks, nails, large clumps, etc. and even out the soil. Then I would use a roller to compact the soil enough so that you can walk on it without leaving deep footprints. Then if possible I would lay down a nice layer of good topsoil/compost, rake it out evenly, and roll again. Now, when you plant your grass seed, don't plant more than the recommended amount, it will lead to problems, especially in a spring planting. If it says 7-10 lbs/1000 square feet, stick with 8-9 lbs./1000 sq. ft., spreading half of it in a north south direction, and the other half in an east west direction. Also tall fescue likes good soil contact, and I feel top dressing is the best way to go. It takes a few hours, but it will pay off in the long run. If you do top dress, you don't need much 1/8-1/4 inches, but I would stick to the low side, just cover the seed till you can't see it. Opinions on starter fertilizer vary, but I do half the recommended when seeding, the other half after the first or second mowing. Now, once that's all done it is crucial you keep the seed moist. This usually requires three daily waterings, of 5-10 minutes. Since you have shade though, you might only need two a day. Keep in mind your three year old will have to stay off the area for about two months. Hope this helps.

may want to get a soil test and ammend accordingly. Its been a few years since I did one but Rutgers will do it for you for $10 or $15 I think. It doesn't take all that long either. Just contact a local extension office and they will sell you the bag, just follow the instructions and mail it in.