Hi Pat,
From my daughter's (3 yrs) prospective, the best restaurants are
Play 'n' Dine at Hollywood and Vine and
Cinderella's Royal Table. She also really enjoys Chef Mickey's, the Garden Grill, the Sci Fi Dine in Theater, and her favorite counter service restaurant is Cosmic Ray's over in the Magic Kingdom.
In my opinion, the best place to stay in WDW is a tower room at the Contemporary. The rooms are absolutely beautiful. They not only include a gorgeous flat panel TV, but also a computer in each room. During my last stay the online reservation system was not up and running, but from what I understand you can make and modify your dining reservations right from the computer in your room. You can also go onto any Disney website for free. This would include the moms panel site and most importantly the PhotoPass site. The monorail travels right through the lobby and there is also a walking path to the Magic Kingdom. An alternative would be either of the other two monorail resorts, the Grand Floridian or the Polynesian.
I could go on and on about all the great attractions for 3 year olds. If you don't want your daughter to get too scared, I would stay away from Goofy's Barnstormer, It's Tough to be a Bug, and Honey I Shrunk the Audience. Also, before going on Snow White's Scary Adventure we talked about how there was a witch inside. We then said over and over "we're not scared of that silly witch". My daughter has also always been good on the haunted mansion, I think 3 yr olds are too young to get the haunted house concept. The ride is overall pretty mild and the ghosts are more funny than scary.
Have a great trip