I don't think you can change your mind at check-in. You need to give them 5 days notice of cancellation, and they may not have availability at another resort.
Check out the toddler size aerobed. It's called the "sleepaway" bed - I got ours years ago, and it's perfect for a child. It has raised sides, so they won't fall out of bed. Smaller (a bit) than a twin size, so it takes up less floor space. And it inflates in a minute, deflates fast too, so you can inflate it at night, and deflate it in the morning for floor space.
Personally, I think it would be hard with 3 kids and 2 adults in one room. If you're not doing the dining plan, you may want to look into something like the doubletree guest suites, so you'd have 2 rooms (one with two beds, the living room has a sofa sleeper, I did that with my folks when I was 24). The cost can be much less also. Deluxe is a bit better, but you're still sharing one room. I'd go for the comfort of extra space. Or two rooms at another Downtown Disney resort?