We just returned from 4 days with family, including a grandson age 7, and granddaughter age 4. If you can believe it, their favorite of all was Pirates of the Caribbean! And our granddaughter was terribly upset because she wasn't quite tall enough for Crush's Coaster. But she loved the cars ride (she is a cars fanatic, and will watch the movie every chance she gets).

They both also loved the Casey Jr ride. Peter Pan gets awfully crowded, so we only rode it once, but we did Snow White a few times, and neither kid seemed to be bothered. So, what's scary for one kid isn't necessarily scary for another -- I'd advise you to just gauge how your own kid reacts, and go with the flow.
For relatively inexpensive meals, I'd recommend either the Bella Note restaurant in Fantasyland, near Small World (we never saw it crowded), or the Cowboy Cookout Barbecue in Frontierland (it can get really busy, but we thought the food was great, and not too over priced). We also ate at the big counter serve place inside Studio One in the studios, where our kids loved the pizza kids' meal.
Have fun!
