We always come over at the October half term and have, on the whole, experienced very good weather. The last few years have been glorious, and not so hot that you have to worry unduly about applying sun cream continually. A couple of times we have had some big rainstorms, so it's best to be prepared for these, but we have never had a whole week of rain/cold - maybe we have just been lucky! It's a great opportunity to travel round and see a bit of the island when it is not quite so busy. Last year we spent a couple of days in Palma and it certainly didn't feel any less buzzy than usual. Actually October is my favourite month in Mallorca - everything is so green again, after the hot summer, and the atmosphere is really mellow. And the beaches are really quiet.
Yes, hotels are starting to close down at the end of October but you will find plenty of restaurants still open.
Halloween in the Square in PP is also a lot of fun. Some of the restaurants - Nico's in particular - really pull out all the stops on this occasion... you might want to pop in there in advance of taking your younger ones, just to check that the costumes/special effects aren't just a bit TOO scary... The older ones could I'm sure go trick or treating if they aren't too old - lots of the restaurants have big bowls of sweets to give away. There were certainly quite a few local teenagers in full Halloween regalia last time.
One last tip: it can get a bit chilly in the evening, so bring some warm outer layers if you want to sit outside. If you are renting a villa, try and find one that is heated and, preferably, with a heated pool - then you will have no problem swimming, even if the temperature does dip during the day.