If you stay on site, my favorite resort is Port Orleans: Riverside. Beautiful, expansive, and has activities for everyone.
I think staying onsite is overrated when you have younger kids.
When we went in 2001, we stayed onsite in a 1 bdrm villa at Old Key West, Disney’s onsite timeshare community. It was about $300/night rented directly from Disney. It gave you all the benefits of being onsite plus the amenities of a timeshare - full kitchen, separate sleeping areas, washer/dryer, restaurants on site, and great pools. Separate sleeping areas/tvs is key when you’re traveling with young kids because they nap and go to bed much earlier than you.
There are sites where you can buy Disney points from owners and use these towards booking villas. I think it’s far cheaper this way but I honestly was too lazy to try and figure out the system.
That being said, we could have rented a 2 bdrm villa at one of the nearby Marriott timeshares for $150/night and I later regretted canceling that reservation as we as we didn’t take advantage of the perks for being onsite. For instance, we drove everyday because we didn’t want to have to wait for the bus. We never stayed late because the kids were wiped by dinner time. So paying double for our room was fiscally stupid.
If I did it again, I’d rent either a private home or a nearby timeshare villa (e.g. Sheraton Vistana Villages or one of the Marriotts) directly from the owner via Redbook or some other rental site. And I’d take the money I saved on lodging and put it towards activities, such as the Illuminations fireworks cruise (which I highly recommend), or a day at Seaworld.
P.S. If you park hop, you only have to pay to park once. After that you just have to show the attendant your parking receipt and it’s free the rest of the day.
I don’t know how to make this offer without sounding creepy, but what the hell.
My family has a large two-story colonial with a few spare bedrooms. We’d love to host you for a while. We live in Winter Park, which is a 30 minute drive to Disney.
Thank you, Autolycus. I’m sending an email to the address in your profile.
I went in April with my mother, brother, his wife and their two kids (9 and 13). We stayed at Disney’s Caribbean Beach Resort and did the Disney Dining Plan. Disney even has a bus system to pick up guests from the airport, so basically, we were in Disney’s hands from beginning to end. As others mentioned, staying on-property lets you take advantage of the Magic Hours (which are either in the morning or evening and restrict the park to those staying in Disney properties).
The dining plan meant that almost all of the meals were paid for in advance, but you have to be careful. You get basically three meal and one snack coupons a day, but they have weird math to determine what costs what. For instance, my mother just wanted toast in the hotel room one day, so we got it for her using the Disney Dining Plan coupons, but the two pieces of bread counted as one snack (but would have cost less than a buck had I bought them for cash from the resort cafeteria). On the other hand, my brother planned a “special” meal for almost every day. One day it was a luau at the Polynesian Resort and once it was a princess dinner at the Restaurant Akershus in the Norwegian pavilion in Epcot. I noticed that almost every special meal was either served either family style or buffet style, but I suppose that makes it easier to serve hundreds at once.
And by the way, the characters I enjoyed meeting the most were Cinderella’s evil stepsisters, because they did a great job of being nasty in character. (And the live shows were uniformly excellent; our favorite was the Festival of the Lion King show at Animal Kingdom. Test Track in Epcot was probably the most exhilarating ride.)
I’ve done both and much prefer staying onsite. Although with young kids and grandmothers, a house would be tempting.
Note that Autolycus is “a renowned thief … and a formidable exponent of wrestling.” If you stay over, hang on to your wallet and keep out of arm’s reach.
Yeah … if he tries to steal anything from you, your troubles will be squared 
Well, heck, now I’m really interested!
I don’t stay at the park for two main reasons:
1.) Too many great places to eat in Orlando
2.) No Orlando vacation is complete with out spending a day at Discovery Cove . It’s pricey but it’s also all inclusive. (that includes free beer! heh, heh,) The food there is pretty tasty also.
If you want to pet the dolphins; make your reservations now.
I also highly recommend Discovery Cove, but the OPer’s kids are 3 and 4. Minimum age to swim with the dolphins is 6.