The step-grandchildren were included because they are the Queen Consort's grandchildren and are old enough to have a role, e.g. serving as the Queen Consort's pages. George, Charlotte and Louis were included because they are the children of the heir to the Crown and the monarchy, being an institution based on primogeniture, has an inherent hierarchy.
Meghan's decision not to attend plays into her "victimization narrative" that she and the children are ostracized and cannot go to the UK because they would be snubbed. That is, however, far from the truth. The King would be totally justified not to invite Harry and Meghan to the coronation after what they pulled in the Netflix docuseries and Spare. However, he extended them an olive branch and send them an invitation. At the ceremony itself, they would be treated exactly like other non-working royals (which they themselves chose to be), no more, no less. Prince Andrew and his daughters won't be in the coronation procession or the balcony either and won't have any role in the service. And Archie and Lilibet would never attend the service anyway because they are too young and are not in a category like Louis (one of the heir's sons) that requires them to attend. That doesn't mean that Archie and Lilibet would be mistreated or that the Family would be hostile to them. On the contrary, I am pretty sure the King would be delighted to see them in private and loves them very much.
As I see it, Meghan is the one who deliberately keeps the children from having any contact with Harry's family to feed into her narrative that the children are "unwanted" or "discriminated against" and must build, to quote the Netflix docuseries, a new "family of friends" in California (unsurprisingly the line you are repeating here). We know for example that the Sussex family was invited to spend the summer at Balmoral in the past and turned it down. It is very unfortunate that the children have been caught in Meghan's scheming like that.