Depends on what's important to you. Your kids will probably love the pool at the DLH much more than the GC. You just cannot compare the hotels, the Grand Californian is a beautiful "new" craftsman style resort. The Disneyland Hotel is dated (60/70ish). But they have redone the rooms and they are comfortable compared to what they were like before. Are they great - no - comparable to a Holiday Inn - sort of - but have some Disney charm (in my opinion). If you want a hotel that is more of what you are used to staying at in Orlando, then stay @ GC. If you don't care that much about your room and dated hallways, etc. and the pool is really important then stay at DLH. You can use the restaurants at either, so that should not really factor in. If money matters, DLH is cheaper. You'll have a great time no matter what you choose.
The only other problem we had @ DLH was the pool area was FILTHY when we stayed a while back. We complained big time as this is not tolerable to me for a Disney (or any) hotel property. The trash cans were overflowing and the hot tub was full of dirty green foam (gross). The chairs by the pool were also dirty. I don't know if they've improved or not, but this did bug us on our last stay.
Anyway, enjoy your trip.
Brando