Hello Jeff,
California Grill is a wonderful choice for dinner! Not only is the food amazing, but you'll also have a spectacular view of Cinderella Castle and the fireworks that evening.
In honor of Independence Day, the usual Wishes Nighttime Spectacular will be replaced that night with a very special fireworks show, Disney's Celebrate America! A Fourth of July Concert in the Sky, which is scheduled to begin at 9:00 p.m. In my experience, dinner at California Grill takes at least 2 hours, so I would personally go with the 7:05 p.m. reservation time. That will give you time to be seated, enjoy most (or all) of your meal and still be in the restaurant when the fireworks begin. When that happens, the restaurant will dim the lights and the soundtrack will be piped in so you can fully experience the show. You're welcome to enjoy the view from your table or go to the outside observation deck.
I hope that is helpful as you make your plans, Jeff, but please write back if we can help answer any other questions.
Wishing you a truly magical vacation!
Beth