If I may make a suggestion....with your very first trip, put your foot down. They are your points. We ALWAYS take the master bedroom, no matter who we bring. If they aren't going to be happy with the kids on the couch in the living room (so everyone else can hang out while the kids sleep), that means you are going to have adults on the sleeper sofa. That's either your in laws, your bil and sil (who will want to be with their darling children) or you and your wife. So you are paying to take her family to Disney so you can sleep on a "not quite comfortable" sofabed in a living room?
Have grandma and grandpa sleep with the kids. Put your BIL and SIL on the sofabed. Take the master. And tell people if they aren't happy, they could have picked studios and gotten privacy, or bought their own points.
If you don't do this now, every trip will be you giving up the luxuries of what you bought to optimize the trip for someone else. And you'll discover that your friends and relatives talk to each other, and therefore all start feeling entitled to dictate the terms of your gift - because you've let people do it before.