I haven't used my rewards card yet. However, I just booked our reservation, which I'm surprising my DH and DD with where we'll be staying, and was told when I arrive to present my rewards card along with my other form of payment. I later confirmed this by looking at the information sent with my rewards card. It says to present the card at participating Disney locations to redeem your Disney Dream Reward Dollars for merchandise ... hotel nights. The example given was for a $50 purchase, redeem 20 reward dollars and pay the remainder with cash (or other form of payment, i.e. Disney Visa card). It also goes on to say that the card can be used with Disney reservations.
I'd like to hear from someone who has presented their card at the time of check-in towards payment of their room only reservation.
I hope this helped some.