Maximum limit for book targeting 4-6 year olds

You're stuck in the middle at that length. It's too short for a chapter book, but too long for a PB.

I'd suggest trying to cut and see how it works out. Especially when targeting that age range.

I've usually seen 1000 words as the max for a traditional PB, although I'm sure there have been books that have stretched that limit.

It's more than just length. The prose used to write a picture book and that used for a chapter book are NOT interchangeable!

A picture book is designed to be read out loud by a proficient adult reader. The writer can use all sorts of big words and rich language, as long as the rhythm and story will make the meaning clear. After all, the kid can always stop the grown-up and say, "What does topiary mean?"

A chapter book is designed for a beginning reader. The syntax must be kept simple, the two- and three-syllable-words must be kept to a minimum, and the storyline must move forward in a very clear way. A kid who is listening doesn't have to work very hard; all their brain power goes to enjoying the story. A kid who is learning how to read has to remember all of the 40 sounds of English, most of which have multiple spelling possibilities, not to mention the non-phonetic words like "their" and "who." The amount of brain power used to figure all that out limits the amount of memory left for keeping track of the story.

The length is not actually a problem, in and of itself. There are plenty of books (Arnold Lobel and Cynthia Rylant are the god and goddess of the age range) that fit in that length. But writing prose at the right DIFFICULTY for that age range is VERY, VERY hard to do well.

You also have to take into account the attention span of a young child. If your story is really one that would be enjoyed most by a 5 or 6-year-old, then find a way to trim it down, get to the point and move on. Believe me, even the advanced ones at that age can't sit still for very long. I tried to have my first-graders lie still for 5 minutes today. Not one of them made it.

What you're describing sounds like what is sometimes called a picture story book. The page count is still generally around 32 pages, but the word count is twice or three times as much as a picture book.

I looked it up to be sure I was right. Here's the description of picture story book from The Business of Writing for Children by Aaron Shepard. Hopefully this quote fits within the definition of "fair use".

"Picture story book. A picture book with more text and plot development. Typically, text and art are separated on the page, and the text could stand alone. For kindergarten to grade 3 or higher. Book length is still usually 32 pages, but can be more. Manuscript length is five to nine page [he's counting a page at 250 words]. Note: Through the distinction between picture books and picture story books can be helpful to a writer or illustrator, the two types are most often lumped together as picture books."

Here's another idea. Make a copy of what you have now first. Then ruthlessly rip out about half of what you have now; look for too much description, dialogue that doesn't advance the plot, narrative that's not needed, etc. Don't worry too much about "flow" at the moment, just get it down to around 1000 words. Just do it as a quick experiment.

This is one situation where having a friend look at the work and getting their opinion might help; you might be too close to see some places that could be cut or cut down ("Hey, that's a cute little scene, I don't want to lose that!"). I'm be glad to take a look and give you an opinion if you'd like.

The current trend is to sell very few of the longer "picture story books." Non-fiction ones, biographies for example, still do well, but they sell mostly to schools and libraries. The big chain stores just aren't stocking long picture books, because they don't sell enough of them.

It sounds like you've already gotten really good advice. If the content is most appropriate for young listeners, keep trimming until you can't possibly trim any more.

Ah, yes. But editing is becoming one of my favorite parts of writing. It forces you to cut out the fluff and stick to the story. It's a challenge but you'll become a better writer for it.