My 4 year olds thought a few parts were funny (whenever Arthur was changed into an animal, for instance), but the plot itself was not terribly interesting to them. They also found some scenes to be a little scary, especially the scenes involving the witch and when Arthur-the-fish is almost eaten by a toothy fish. Nothing too bad, but I thought the story ended rather abruptly, and it wasn't clear to me that my kids recognized that Arthur had "earned" the throne in the end. I think perhaps kindergartners might get a bit more out of this.
My other issue is when the witch shape-shifts into a buxom beauty for a few moments and talks about how she now looks "beautiful." The new form she's taken has a 4" waist and seriously gigantic breasts, and I thought that part was a bit overdone and wasn't sending my daughters any great messages.