Just wanted to reiterate others' thoughts on scariness. I actually think a 16mo might do better than our 34mo did because she is just *so* young, but my toddler found every dark ride except IASW (where he already knows the song forward and backwards and adores the tune--along with Jingle Bells, so IASWH was a big hit) utterly terrifying, including Winnie, which made me really sad. But when you look at those rides from their perspective, they make a million blind twists and turns and are filled with loud songs, voices, and noises, and crazy colors. He also hated going backwards, so what for me was one of the more enchanting parts of Little Mermaid, the descent, freaked him out.
Having said that about *indoor* rides, he whooped it up on anything outdoors he was tall enough for at 38", with Mater's and Luigi's being rides we went on multiple times each day. He also made multiple requests for Astro Orbiters and Dumbo, Mickey's Fun Wheel, and both carousels, and thought Jungle Cruise was OK. The Tiki Room was indoors and has thunder and lightning, so scary at times for him.
As for characters, he was hesitant the first couple of days, but by our second week had no problem giving hugs and high-fiving characters in costume. He was always fine with the face actors (read: princesses and fairies).