Do we need to make reservation? Yes. The entrance has indication of driving school's time. In my last visit, there is 2 sessions. 11:00 (11:10 classroom, 11:30-12:30 road experience) and 14:00 (14:10 classroom, 14:30-15:30 road experience). Not sure the case in summer, it is better to ask and register when you enter the park.
And how long for the whole process? 1.5 hours
Also, if we do not know Japanese, kids ok to understand? We also don't know Japanese, but they will show a video which is easy to understand. If you have driving experience in Japan, you can help to explain the road sign to your kids.
And is outdoor? Yes