Hey OP!
Are you staying on-site or off? You mentioned RD at 7am (EMH), so I'd assume this means you're staying on-site.
If you're on-site, this puts you at a huge advantage. Having spent the past few Christmases at MK, I can say that we've never had a problem getting into/back into the park.
Christmas at Magic Kingdom is unlike anything you've ever experienced - in a good and bad way. No doubt, the attractions, shows and decorations specific to Christmas is incredible special. Add to that the fact that you're at the happiest place on Earth during the happiest day on Earth, and you've got a pretty memorable experience. But from reading your signature, you're a Disney vet. You've been there a solid amount of times and are well aware of just how crowded it gets. Well, multiply that.
There's a point on Christmas day where it gets CRAZY crowded. Noticeably crowded. Having traveled there during July, I remember only REALLY noticing the crowds when we'd wait on line for rides and see the wait times. In Magic Kingdom and the parks during Christmas week, there's a point where you really take a step back and say "wow, this is pretty crowded!" In other words, you definitely FEEL and SEE the crowds!
So in short, take the break - and maybe allow your daughter some time to get off her feet! A perfect plan would be to hit RD and have some time with your daughter. Maybe breakfast and go on a ride or two. You can definitely get in a headline ride or two in the AM. It doesn't get bad until ~10am. Have your daughter go off to work and your family can tour until ~noon.
I'd recommend having your daughter come back to your room/her room and relax after work. It's going to be a LONG day and she's gonna WORK. Maybe head back to MK at night (~6 or 7) or just in time for your FP+. By then, many families will be heading to dinner. Also, after the fireworks, many one-day guests will head for the park exits. I BELIEVE the park is open till 1am, so after the 11pm(?) fireworks, you'll see some reduced wait times.
Anyway, best of luck and I hope you enjoy your trip. I have a free guide available at survivedisxmas.com! Hopefully it could help with your trip planning!