You must buy the DDP for the entire length of your reservation. The only way you can purchase fewer nights than you are staying is to split your stay into more than one reservation (one with DDP, one without.) Now, that may be a financially good thing to do because when you are not buying the DDP you may be able to get a discounted room rate.
As to the character dinners--they are a great experience. The food is good. The food is better at places where you order off a menu, but there's nothing wrong with the food at character dinners. With little people, the atmosphere and fun can't be beat! You'll have a great time with the characters posing for pictures with the kids, signing autographs, and messing around (stealing a hat, for example.) Some of our best WDW memories are from character dinners.
On the DDP, the dinners are a better value than a breakfast.