The Polynesian Resort is absolutely beautiful! Do not pass up the chance to stay at this gorgeous resort. The grounds are breathtaking and the pool is fabulous.
Since your children are young and you have just three days at WDW, you will probably spend a lot of time at the Magic Kingdom... and you won't have to see MK and do everything in one day. Being on the monorail is an incredible luxury. You can go to the MK in the morning, easily return to the resort for naps or a swim in the afternoon, then return for more fun, parade, and fireworks in the evening. You will not waste valuable time waiting for a bus and travelling the distance. You'll be able to spend most of your time having fun... and it will be more magical with rested, happy children.
Being on the monorail will give you access to the Grand Floridian Resort and the Contemporary Resort to explore or dine. Additionally, you could catch a boat from the Magic Kingdom dock to the Wilderness Lodge. It's a beautiful boat ride over and again the resort is amazing. You will have so much to see and do in the Magic Kingdom Resort area.
Having a verandah is wonderful, and you can still enjoy "cruising" while your children nap. You can sit back and relax, have a cool drink, order froom service, read a good book, watch the beautiful,blue ocean....you wouldn't miss a beat... and you would not feel confined in your state room while the children slept.
If you're still thinking Cat. 10 is a better set-up but still want the Polynesian Resort, you can do the reservations separately. We did this both times for a 3-night cruise, staying 5 nights at a WDW resort prior to the cruise. There was no problem at all with reservations, accomodations, etc. and no difference in pricing. Everything went absolutely smoothly and we got the exact vacation we wanted!!!
Good luck with your decision. Hope I've been some help.