Well, you have a lot of research ahead of you! These are not easy questions and depend a lot on your preferences. The 7 year old will definitely want to do Magic Kingdom, so mae that a priority. New Fantasyland is opening. The Sorcerers of the Magic Kingdom game might appeal to your older kids too.
Hollywood Studios has the most thrilling rides of WDW with Rock 'n Roller Coaster and Tower of Terror, and also the great newly revamped Star Tours, great for thrill seekers or any Star Wars fan.
Animal lovers will of course love Animal Kingdom (we usually end up spending a day there - but if you are not the type that could spend all day at a zoo, a half day might be enough to do all the "non-zoo" things - also has a great coaster, Expedition Everest.
Epcot is one of our kid's favorites (now 14 and 18), but some find it less exciting for kids. It too though has the just about to be reopened Test Track and Mission Space for thrills. Also, Soarin' is one of the best rides at all the parks.
If you kids like Harry Potter, at least an afternoon/evening to Universal's Island's of Adventure is worth it.
When we do a long trip, we try for at least 2 days at MK and Epcot, and .5-1 day at AK, DHS and IoA.
The dining plan depends on how much you eat. If you like sit down meals, it does save money, but of course you need to manage it to make sure you aren't going over and that you are charged correctly (a frequent problem). We usually end up with a fridge full of desserts from counter service lunch back at the room.
At pretty much every time of year, the sit down restuarants get crowded, so best to make at least one reservation ("ADR") per day if you want a sit down meal. Character meals (especially Princess ones) and new restaurants (like Be Our Guest) can fill quickly, so booking at 180 days out is not at all extreme (that's the earliest you can book).
Villas are a good deal - especially if you rent points from a DVC member. Also, Art of Animation has family suites that give you a little more room at a great price.