Alyssa,
With a smaller child, I think you will find that most of your time will be spent at the Magic Kingdom (as opposed to the other parks). With that in mind, I always feel like the monorail resorts (
Grand Floridian,
Polynesian,
Contemporary) are the best choice, if you can afford them. If not, any of the Moderate or Value hotels are a good choice, and just let budget and theming be your biggest considerations in making a selection.
As for character meals, what you want to do is make an Advanced Dining Reservation for one of these popular dining events. Just call 407-939-3463 to make your reservation. You can do this 90 days ahead of time, and I recommend you call as early as possible, as these meals are very popular, and book up very quickly.
I am more than glad to answer any other follow-up questions that you may have. Just go to my bio page and give me some more info on what you like to do, what her interests are (especially favorite characters and movies!). I will come up with some meal suggestions, park touring tips, etc.
Have a magical vacation!