Hi Connie!
You are going to love the Disney Dining Plan (DDP)! My family purchases it each time we visit and we find that it saves us time, money and stress. Your younger daughter will not be on the DDP because the plan only applies to guests ages three and over. Guests under the age of three can share meals with their parents/siblings. Your five-year old daughter will love being able to dine with the characters, especially Cinderella at Cinderella's Royal Table.
I absolutely think that certain restaurants at WDW are worth the two Table Service (TS) credits.
The best are Cinderella's Royal Table (CRT) for two TS. Brown Derby at DIsney's Hollywood Studios with the Fantasmic! Package is definitely worth it. The food is great and the Fantasmic! package saves you a lot of stress with scoring seats for the Fantasmic! show.
My family loved Sci-Fi Dine-In Theatre at Disney's Hollywood Studios and it is only 1 TS. I think it is a must-do, especially for kids. My son still talks about being able to eat while watching a movie. As a bonus, the car seats two per row, so my kids sat together while my husband and I got to sit together. It was like a date-night!
Via Napoli is also a great choice! They have the best pizza in all of WDW. A fellow Moms Panelist even told me that Via Napoli has their own special water sent in to replicate the authentic pizza of Italy. You can't get more authentic than that!
When we ate at Coral Reef in Epcot, the server took my kids on a hunt for hidden Mickey's while we waited for our food. They loved it. You have some really great choices here. The other suggestions I have include,
Akershus Royal Banquet Hall, Le Cellier, Crystal Palace (dine with Winnie the Pooh) and Chef Mickey (eat with Mickey and friends.)
Please let me know if you need any other dining suggestions.
Magically,
Stacy