Here are my guestimates on your options going from cheapest to most expensive.
1) Two (connecting) rooms at a value
2) A 2 bedroom unit at OKW renting points from a DVC owner ( AS LONG AS YOU DON'T HAVE ANY FRIDAY OR SATURDAY NIGHTS INVOLVED)
3) Two connecting rooms at a moderate
4) A 2 bedroom unit at any other DVC resort renting points from a DVC owner (AVOIDING WEEKENDS)
5) a 2 bedroom unit at OKW renting points from a DVC owner (including weekends)
6) a 2 bedroom unit at any other DVC resort renting points (weekends inc)
7) a 2 bedroom DVC unit renting from Disney.
You have to remember that renting points from a DVC owner is a private deal between you and them, so take precautions ( I've never heard of any problems, but that doesn't mean they don't or couldn't happen). There is only a small difference between options 2,3 and 4. This is because OKW is the lowest points cost of DVC results. There is a bigger difference from 2,3 and 4 to options 5 and 6 because DVC points jump in cost for Friday and Saturdays. Renting a DVC unit direct from Disney is probably the most expensive of these options and would be close to renting two connecting rooms at somewhere like AKL or WL.
You do have one more option, the Cabins at Fort Wilderness. I didn't include this because, possibly, for your group it isn't ideal. This is because the room make up is as follows. A bedroom with a queeen or a double (you and DH) and bunk beds, with ages 4 and 6 this may not fly (although the kid in the top bunk might

, appologies for poor joke

) . In the living room there is a pull down (or may be pull out) double bed. I don't know how solid/comfortable the pull down beds are, so I can't say if this is a workable option for your MIL. The baby would go in a pac away crib and could go in either the bedroom with you or in the living room with your MIL. This option would probably be the second cheapest if added to the above list, but due to the ages of the kids and having your MIL on a pull down bed I think that combination rules it out for this trip, although it may be a good choice in the future as your kids get a little older and you'd need something for the 5 of you.
Probably your best ( most economic ) option for this trip would be to rent an off site villa. You could get a 4 bedroom place, close to Disney (15 minutes drive) cheaper than two rooms at a value. You'd get a full kitchen, living/dining room (many have family rooms with a 2nd TV for the kids), everyone gets a proper bed, MIL gets her own room, you and DH don't have to share with the kids, probably a private pool. You would need access to a car, but in your circumstances, unless you HAVE to stay on Disney property, I think it's definately worth considering.