Hi Alison!
You can't go wrong with the dining plan. I would strongly encourage getting one of the dining plan options, particularly since it looks like you'll be bringing a pretty good group.
Disney has 3 options: Quick Service, Standard Dining, and Deluxe Dining. Quick Service will save you 20% vs. out of pocket, 30% savings for Standard, and 40% savings for Deluxe.
The question will come down to how much you want to eat. If you expect to be on-the-go a lot, with little time to sit down, I'd choose the Quick Service option, which is a quicker check in/check out process, and doesn't require reservations.
The Standard Dining entitles you to 1 table or quick service per person per day.
Deluxe Dining is 3 full meals a day. Those meals are also either table service or quick service. The only part where you may feel locked down is the table service, which require reservations. But you can cancel any reservation at least 48 hours in advance without paying an extra fee.
Quick services are generally less expensive than table service. In your situation, I'd recommend at least the Standard Dining Plan, where you can use your one meal per day as a table service (relax and be treated-smile), get 1 snack, and then pay out of pocket if you want anything else. To find more information on the options, click the following:
Quick Service
Standard Dining
Deluxe Dining
Good luck! Your 5 year old is going to have a magical time!