Hi Laurie!
You ask a fascinating question for which there really is no right or wrong answer. Let me give you the advantages of each of the housing scenarios you propose and then you can make a well-informed choice based on the needs and preferences of your family.
1. Two adjoining Little Mermaid rooms at
Disney's Art of Animation Resort would offer the luxury of separate sleeping quarters and two full bathrooms. This resort also offers amazing theming for young school-age children. You could spend the better part of a morning wandering around the resort capturing gorgeous, larger-than-life photos with characters from Cars, Finding Nemo, The Little Mermaid and The Lion King. Additionally, the Landscape of Flavors food court is the best on property, in my opinion.
2. If your family prefers a more rustic experience, you can't do better than
The Cabins at Disney's Fort Wilderness Resort. It's a short, delightful boat ride away from Magic Kingdom Park. Also, you can take advantage of so many kid-friendly activities at this resort including fishing, horseback riding, carriage rides and swimming. The cabins have only one bathroom but they offer a full kitchen and space for six guests.
3.
Disney's Contemporary Resort is the closest resort to Magic Kingdom Park. You can walk there in 10-15 minutes or take a fun monorail ride to the park's front gates. This resort is a deluxe resort so the amenities in general are a bit more luxurious. Personally, this would be my choice because of its proximity to Magic Kingdom Park.
Good luck with your decision. You can't go wrong with any of these options.
Wishing you many magical memories,
Jill