It is time that you tried an Epcot resort.

We love both the BC and the WL but give the BC an edge on location. We love the flexibility to walk to parks and restaurants when staying at the BC.
What a great room. Could you see Illuminations from there?
The second bedroom will have a normal bathroom, meaning it will have the shower/tub combination. The bathroom for the master bedroom has the big bathtub in one room and the toilet and shower stall in a second room. There are connecting doors for both of these rooms.
Dedicated 2 br villas have two queen beds. There are 2 br villas that have a studio as the second bedroom. In that case it would have a queen bed, a sofa sleeper and I think maybe a Murphy bed. I'm sure someone can confirm that. A cash reservation can't guarantee a dedicated 2 bedroom.
If your sister and BIL are comfortable having the kids sleep in the living room then you could give them the master bedroom. If they don't want the kids to sleep in the living room then I would give them the second bedroom. The kids can always use the big tub in the master if you let me. They will also have a regular tub in the other bathroom.
We have stayed in BCV's with adult children and grandchildren and we always take the master bedroom and let the parents with kids have the second bedroom. It gives them their own space and a little more privacy. And besides, we were paying, so we get to take the best room.