SkyDog75

Nice little bike! If you think it's worth the price premium, then you've got the right bike.

But price, weight, and perceived quality aren't the only differences. There's also also a size difference. The Woom 4 is a smaller bike than the Diamondback Insight 20. The Woom 4 has an effective top tube length of 430 mm, compared to 457 mm for the Diamondback. The DB has a longer stem. The Woom has 110 mm crank arms, compared to the Diamondback's 155 mm cranks. The wheels on the Woom are almost 2" smaller than the Diamondback's. In short, almost everything about the Woom is scaled for a smaller kid. This might be a good thing for now, depending on the rider's age and size, but it means the bike will be outgrown sooner.

As for your reasons:

1) REI says the Diamondback Insight 20 is 28 pounds, but Amazon lists the ship weight as 29.6 pounds, including packaging. Seems safe to call it somewhere in the 20's.

2) Freehubs & cassettes are a mechanical upgrade over traditional freewheels, particularly because the bearings are further outboard, reducing stress (and the possibility of breakage) on the rear axle. But since we're talking about a small kid's bike, either a freehub or freewheel is perfectly adequate. As for the extra cog... If your kid's anything like my daughter, you'll notice the difference between 7 and 8 cogs a lot more than she will. Heck, my daughter's perfectly content with 5 cogs on her road bike. (She might not even know how many gears she has since she's got friction shifters and there's no numbering on the shifter.)

3) The Woom has slightly nicer stock derailleurs, but either bike can be converted from twist shifters to triggers with comparable cost and ease. But about shifter types, since we're on the topic... My experience echoes Sidney's above. My own daughters seemed to find grip shifters more intuitive than trigger shifters.

4) Yup. The Diamondback's seatpost and saddle are about as entry-level as they come.

5) I actually prefer the gear ratios on the Diamondback. The 32/32 low gear on the Woom, combined with 20" wheels, will get you down to about 18 gear inches. That's a really, really low gear; quite possibly too low for practical use. The Diamondback's low gear is about 28 gear inches -- roughly the same as a touring bike that's designed to carry heavy loads over mountain passes. The Woom's gears 3-8 coincide roughly with the Diamondback's 1-7, meaning the Diamondback actually has a greater number of available gears within a practical gearing range.

6) Wider tire selection is nice, but tires are readily available in either 20" size.

7) The Woom does seem like a nice bike, and the light weight is extra nice since most kids' bikes are absurdly heavy. The only knock I have against it is the gearing, which is easily correctable. And that it's smaller, which might be a good thing for now depending on the rider's current size.

...but let's not overthink this. Get the kid on the saddle and enjoy!