With the small tires that the KX65 has, the bike will never be "trail worthy".
If you are concerned about the manic power delivery, don't be. Your child will adjust to it, and crave MORE. I got my (then 8-year old) son a KX65 and thought to myself "what have I done". It only took a few weeks and Connor was on the pipe and loving the power.
If your child outgrew the power of the XR70, there isn't much else in that frame size. Our issue was that Connor started jumping his XR a lot and the frame just wasn't made for it. Everytime he landed he'd bottom-out the suspension. I had to get him a bike that suited his riding style.
The XR70 isn't a dream in the woods either, but the auto clutch does make it easier than the KX. If the clutch is an issue, you might want to find out if Rekluse will be making a auto clutch for the -65.