when our kids were younger we did it all 3 ways (well, we owned dvc at the time so not the point rental aspect but in 2 b/r dvc). my take on it just from a purely lodging standpoint-
the 2 b/r dvc is great if you want more space and to avail yourself of the full kitchen (and now with the ability to do curb-side grocery orders so you can do fast/easy grocery pickup vs. back in the day when we would do a transport that bundled in just 30 minutes for a grocery stop on the way from the airport and you had to do a mad dash in an unfamiliar store has to make it even better). we saved $$$ by getting breakfast stuff, snack stuff and a few items like the big family size frozen lasagnas to have some low key relaxing nights). I loved having the washer/dryer (I took laundry tabs) so we didn't have to pack as much and stuff was clean when we departed. the downside was we were on property so the kids wanted to go out and about when we would have enjoyed some downtime (since I don't think they don't allow pool hopping anymore this might not be as big an issue).
the rental-we did a rental condo (I think I found something through trip advisor). it worked really well. more space than the 2 b/r AND it had a lanai WITH a pool so we COULD have downtime by kicking back in our comfies watching the kiddos in the pool (also nice to have the hot tub to ourselves to relax in when the kids went to sleep). I will say that w/a rental of more than a few days it's vital to bring-extra toilet paper, a couple of rolls of paper towels and a handful of garbage bags b/c you are given the bare minimum. we did a grocery stop as well but b/c we were off property we also had options of lower cost prepared foods so the kids got to have more 'treat' (restaurant) food that they enjoyed getting to go and enjoying back at the rental while watching movies.
when my kids got old enough to roam the parks/properties on their own staying on site was perferable, when they were younger I liked off site b/c it kind of, trying to figure out how to put it



................put an end to each day. as we left wdw property there was nothing that seemed to lure them out-no lobby to ask if they could just 'walk around', no resort pool 'for just one more swim', no gift shops/soda despensers/24-7 Disney music. it was like 'ok we are done for the day, let's get some rest and we can be ready for what we have planned tomorrow'.