I would really, really try to stay on site at Universal. Any of their hotels would be great. The front of the line access is awesome. I have gone there twice with it and twice without it. I will never stay off site when going there. Especially with a kid that age, it is so hard for them to wait in line. Plus, their hotels are awesome. We stayed at the Portofino one night and liked it quite a bit. Last time we stayed 4 nights at the Hard Rock with our 4 and 2 year old sons. The staff was incredible. The pool was awesome. My children were treated so well, I could not believe it. My son still talks about it. They liked the boat ride that takes you to the parks, also. Everyone was so nice and friendly, I never felt out of place with little kids there like I thought I might. They were given gifts at check-in and a toy on their pillow every night. We did not even buy any souveniers! We brought cereal bars and such for breakfast and ate at CityWalk a lot. You might be able to get a discount with an Entertainment card like we did. Check out the Universal Resorts board. It is so close and convenient to the parks, and with front of the line, it makes for a relaxing, fun time. Pay more if you have to and stay on site for the front of the line access, it is invaluable.