We are big fans of JetBlue. They give you a good bang for your buck by including one checked bag per person, advance seat selection, and unlimited snacks in your airfare cost. They also have a TV on each seat which makes the flight itself much more enjoyable.
We have avoided Southwest thus far because we don't like the open seating policy. I know there are tons of folks who love Southwest (and I'm sure they are a good airline) but as nervous flyers and for our own personal comfort, we all want to be guaranteed an aisle seat. We also want to be sitting with each other. This might or might not happen when travelling via SW. I also don't think they have the TV's on each seat.
For our August 2012 and 2013 trips, we purchased our airfare the January prior. Not the day the flights were released, but within a short while thereafter. With JetBlue in particular, we find that prices generally increase as the flight date grows closer. With both SW and JB, if your flights DO decrease in price, they will credit you the difference if you call their customer service department, and you can apply that credit toward a future flight on their airline.
I don't know where you are located, but we have flown from both Buffalo and Syracuse. JetBlue has been the cheapest for our August trips out of Syracuse. For our Christmas 2012 trip, it was cheapest to fly AirTran and JetBlue out of Buffalo (by about $400 vs. the same dates from SYR). We are in Southeastern Ontario so SYR is actually a better airport for us than BUF (we don't have to cross Toronto traffic to get there) but both are doable.
Don't get your heart fully set on Free Dining for the end of August just yet. While many Canadians got PINs for free dining (I was one of them, though mine went to waste as we don't like staying onsite) there are many other folks who were shut out of free dining in 2013 for the first time in many years, as Disney delayed the free dining season until early September. Hopefully it will all work out for you as planned but I thought it was worth mentioning so you can manage your hopes & expectations accordingly.
Have fun planning! Sounds like a fun trip!