In order to receive free dining, you'd need to make a reservation through CRO and pay full rates. I think that you'd also have to purchase at least a 1-day park admission ticket.
Yes they can. They just need to call CRO and book the free dining package. You have to pay full price for your room and buy at least a one day ticket for everyone on your reservation. You need to put down a $200 deposit and have the balance paid off 45 days before arriving. As for your points, you'll have to save them for another trip because you won't be using them during that trip. We have participated in the free ddp promotion twice now. We used our one day tickets and applied them to our AP renewals. We banked our points and used them the next year.