I am the mother of a now 8 year old who was a "challenging" princess obsessed 3.5 year old. We went to WDW twice when she was 3. (and have gone to WDW or DL or both every year ever since). Her first trip to WDW was when she was 2. My DD was so challenging that my MIL and FIL could not even babysit her because they are "low energy", and they could not keep up with her, watch her, or control her when she was that age. DD was actually much better behaved at WDW at age 2 and 3, than she ever was at home, so maybe you will be lucky.
Is she challenging because she is extremely high energy? Ours was a very high energy night owl (in addition to being strong willed, opinionated, and I will just call it what turned out to be advanced brain power). Right at her 3rd birthday, we had to entirely cut out naps, because if she slept even 10 or 15 minutes in the afternoon, she was up until 1:00 or 2:00 a.m. Before you have a panic attack though- she did still stroller nap at WDW at that age though.
The biggest advice I have for you is to be flexible. I don't think anyone ever knows how a kid that age is going to react to DL/WDW until you are actually there. You will need to kind of take your cues and change your schedule up based on what it turns out she likes and is interested in there, and how she adapts to being there. Some kids are overwhelmed by all the activity and crowds. Mine thrived on it instantly. Some kids don't care for characters, mine was instantly obsessed with them and they became more important than rides. You have talked about short jaunts with lots of chill and pool time. Be aware that if her "challenging" nature comes from high energy and advanced brain power, this may not work. I only recall 2 major melt-downs with DD when she was 2 and 3, at WDW. The first was on her first trip at age 2. I was convinced from the boards that we needed an afternoon break with a toddler, even though DH and I usually just stayed in the parks all day. DD was instantly enamoured with the parks the first day and did not want to leave. So, we dragged a kicking, screaming toddler out of MK, only to wind up with a very angry toddler at the resort who refused to nap and was so mad she hid behind a curtain for most of the next 2 or 3 hours. We finally gave up and went back to MK and she promptly happily crawled into her stroller and napped for an hour. After that, we did stroller naps during the after noon, and never left the parks for a break again. The afternoon break did not work for her. As she got a little older we would occasionally build a swim afternoon in, especially at DL, BUT when she was 2 and 3, she did not want to leave the parks to go swim. So... be prepared that your current plan might be met with resistance and you might have to regroup. Her only major meltdown at age 3, was when we were leaving MK to get on magical express to go to the airport to fly home- and I want to cry when we have to leave WDW too so I can't really fault her that much for that one. It was a doozy though. We were on a boat back to the resort from MK in the afternoon and she realized we were leaving for good, and it wasn't pretty. I was embarassed, but several parents told me not to stress out we had all been there, and when I told them we were leaving WDW to go home, most of them laughed and said well that explains everything.
As far as long lines, a snack or activity can help. When DD was little we did the little boxes of raisins for long lines. DD would eat them 1 by 1, and she would then play with the box for a while. She often made friends in line too with people around us. Lines weren't ever that much of a problem, because she quickly learned there are good things at the ends of them. Make sure to keep her snacked, fed, and hydrated....and then be sure to make sure that you take her to the bathroom, even when she claims she does not need to go (my trick is to say I need to go, so you come and just try because we don't want to come back in 10 minutes and miss out on fun). Also keep an extra pair of underwear and maybe even an extra set of clothes with you just in case (not only bathroom accidents, but chocolate accidents, getting soaked with water etc.- DD hated being dirty-still does- so there could be an issue if a mess happened). We had one time at CA, in the water play area at Bugs Land, where we wound up buying her an entire new outfit and shoes, because she was so wet she looked like she had stepped out of a pool or shower, and she was freezing.
I would suggest buying some body glide and using it on her feet to avoid blisters. A kid with blistered feet is no fun. Also, make sure you have plenty of sunscreen.
Even if she has not used a stroller in years, she needs one at DL. DD had not set foot in a stroller since she was 12 months old and took her first steps no matter how much walking was involved (did I mention she was high energy

), but the minute she realized how much walking was involved for Disney, she happily got right in. She needed one through age 5 at the Disney parks.
Also, realize that park touring is a lot slower with a toddler. They move slow, want to see everything, and they suddenly get obsessed with and want to examine the littlest things that you never even noticed. It may sometimes be annoying, but often it is wonderful and eye opening.
Also, realize that what you think they are going to be in awe of and love, may not be what THEY decide the like. I thought DD would be in awe of the WDW castle when she saw it the first time. She barely gave it a glance when we walked into MK for the first time because she spotted Pluto. Suddenly, all she cared about was seeing Pluto, and she happily stood in line for 20 minutes to seem him without complaint- there went our plans to bolt straight to Fantasyland and hit rides with very short lines, but I wouldn't trade that 1st meet and greet with Pluto for anything. DD at age 2 took one look at Dumbo and said "I don't want to ride him" so there went my vision of our first ride on that. We have since discovered that she is a little afraid of heights. On the other hand at age 2, she was obsessed with Living with the Land (a tour of greenhouses) and the Donald Duck boat ride in EPCOT. You just never know what they are going to turn out to love.
As far as the Princess obsessed, a breakfast or lunch at Ariel's Grotto would be a big hit. Also, don't assume that just because she saw Ariel an hour ago at CA, doesn't mean she doesn't want to see her again at DL at Fantasy Faire as you are going by. DD never got enough of characters or princesses. If she spotted one, even if she had already seen them, she wanted to see them again.
You will want to hit Princess Fantasy Faire. Also 2 weeks ago, Rapunzel and Flynn and Merida were alternating meet and greets outside of Fantasy Faire.
Will she sit through shows? My DD has always loved shows and even at age 2 would sit through them without issues. The Aladdin show at DL/CA is fantastic. By Fantasy Faire, there are Tangled (Rapunzel) and Beauty and the Beast shows which are cute- the Tangled one is better DD and I think. Mickey and the Magical Map is a great show and has Princesses. Aladdin and Jasmine have a meet and greet over in Adventureland, but they can be hard to pin down- if you get there and they are not there- ask a CM in the area and they might be able to tell you when they will show up.
Small World has princesses hiding here and there in the ride so it is a fun one. The Little Mermaid Ride at CA will be a must do (probably several times

).
For goodness sake, don't promise her Anna and Elsa unless you have a plan, and most likely want to make the morning run to get to them. We actually did it 2 weeks ago, and the run wasn't as bad as I thought it would be. When we were there the lines for them pretty consistently ran 2 hours the rest of the day (which I had heard they were 3 or 4 a lot, so that did seem to be a little better). Making the run, we would have been done about 5 minutes after the park opened, but Elsa wasn't there, so we let people go ahead until she got there too as we weren't doing the line again to meet both. Some days she is there at opening (like the day before we saw them), some days 30 minutes after, and some days 1 hour after. I bet you can guess which one we hit.

Still would much rather lose 1 hour of park time instead of 2 hours and I would do the morning run and take that gamble again!
I will say though that Auntie Angie's strategy probably works great for her, but that would never have worked with DD. It depends on why she is "challenging" as to whether that might work. We saw BIL try those types of things on DD, and we would stand back and try not to giggle, because DD got the best of him about every time and we could see it coming. My niece is fairly low energy, and a quiet type kid that is not that opinionated, so that kind of thing worked great with her. DD saw it more as a challenge in endurance, and while BIL is strongwilled and opinionated on his own - he had nothing on my crazy kid.

. If it is inherent in her personality as opposed to environment based, that is probably not something that will work with her. If she is not responding to some type of behavior control method, be prepared to change it up and see what works if need be. Also pick your battles- if you are not prepared to see it through and make good on your threat etc- don't start it. Don't let them sense weakness!
DD's 2 and 3 year old trips were probably my favorite. Everything was new and magical and watching them experience it all is just amazing. Have a wonderful time!!!