There are two places you can get the wrist bands, IIRC. One is along the covered walkway that connects the Beach Club to Yacht Club, near Beaches and Cream. The other is located near Hurricane Hannah's.
A lifeguard is stationed at each location. He/she will check your KTTW card, put the wrist band on you, and give you a towel. I'm pretty sure the KTTW cards are coded with the number of adults / children in your party. When we stayed, the lifeguards only looked at one card. They MAY ask to see a KTTW card for each member of your party.