The tournament experiences can absolutely be the most rewarding in tennis. In a mano-y-mano sport like tennis, all the trials and tribulations, all the pressure and adversity are all owned by the two kids in the matches (or the 4 in doubles.)  Watching your kid looking at their rackets strings, take a deep breath and then find a way out of a being down 2-5 in the 3rd set and down 15-40 in the game is a feeling like no other.  You know that your kid just found a way to nail that job interview that started on the wrong foot or found a way out of that argument when they are married later in life. Tennis is life lessons and the tournaments are where the lions share of those life lessons are.  There will be those matches where your child is up 6-1, 5-1 and somehow finds a way to lose 7-5 in the third.  It is painful in those moments but the life lessons are probably greater there.

Getting back to the question at hand.  The answer is somewhat generic and somewhat dependent on the child.  In our opinion the best way to determine which tournaments to play is by geographic desirability.  If you life near the tennis center, then playing tournaments in Pacific Palisades, West Los Angeles, Malibu, Santa Monica, Brentwood, Beverly Hills, Cheviot Hills, Topanga Canyon, Century City, Bel Aire, Marina Del Ray and all the other local Los Angeles communities is great.  If your child wins, you are not shlepping down to Costa Mesa everyday for the next matches and if they lose, you don't have a 1 hour car ride getting them back into their everyday routine. 

The only time where this might not apply is if your child is more of a beginner and you are worried that the local Open level tournament is too hard.  You don't need to worry too much about the tennis level being too weak because you can always play up in higher age group.