The PS is a big-time saver, but is not an actual reservation. I don't know how the ADR process works at WDW, but here, the PS only gives you priority seating over someone else who walks up who does NOT have Priority Seating, but no tables are held or reserved for you. This is a common misconception. You can make your PS for as early as 60 days out (though it is not usually necessary to do it that far in advance). All of the restaurants in DLR (including the 3 hotels' restaurants) pretty much allow walk-ups (with NO PS at all) EXCEPT for the Blue Bayou, located in the POTC ride. That is the only one, according to Disney Dining, that actually requires a PS (it is very, very popular and the wait to be seated is often long even WITH the PS).
Now, that said, even though you can walk up without a PS to all places but the Blue Bayou, for things like character meals - especially the really popular ones like Minnie & Friends, Goofy's Kitchen and Ariel's Grotto - it is highly recommended you get the PS or else you may be waiting a long time. Also, places like Carnation Cafe in DL are extremely popular and the seating there is limited, so the line of people waiting for tables can sometimes be very long (which I have experienced). I would definitely make a PS for Carnation Cafe.
In Downtown Disney, Rainforest Cafe and ESPN Zone tend to get very, very busy, and again, the wait can be super long. Disney Dining will take a PS for all the DTD restaurants except Rainforest Cafe (they have their own separate number for PS), and they only do limited PS's for ESPN Zone (like weekdays they will do, but not weeknights or weekends). The ESPN Zone MVP Club allows you to make PSs for some of those times that Disney doesn't cover, I think.
As for the question of whether mid-October will be busy, well....based on last year's crowds in October and the upcoming events for Halloweentime season at DLR this year, I would say YES! Last year, October saw unprecedented crowds in the parks - even the CMs were shocked and ill-prepared - and I can only imagine that with the upcoming Space Mountain Halloween overlay (along with the Haunted Mansion Holiday and the other cool stuff at DLR in October), the crowd levels will be high!
