12 days x 4 GB Shows = 48 Shows = Heaven!

LOL could you imagine?!?!
IOARocks - Having a few days at Universal Studios in itself is a good idea. There are many great shows, and unfortunately many times show times conflict, or shows get rained out (especially during the summer). You'll be able to make sure you get everything done that you wish. Shows and rides included (prepare for multiple rides on MIB! My mom could ride it practically all day if I didn't "drag her" to the Graveyard Revue and GB Shows...lol).
But take the opportunity to do some things aside from just the parks. Where you have 12 days, feel free to leave the parks for lunch, and return...without worrying about tme lost at the parks(my mom and I went to Burger King once. It was nice because there was only one other group there. Food we liked at prices we liked. It was a win-win situation.

), or enjoy a night out in orlando, and do some karaoke (a local invited me to join her and others sometime...lol) or something. Plus, the onesite hotels are great, and CityWalk has many events, clubs, restaurants, and a movie theatre.
daystar - Staying onsite would be a great idea if you have young kids...you can always head back to the hotel which is only a short walk away. The kids can play in the pool (HRH pool is great) or take an afternoon nap. US/IOA doesn't have early access to the parks, although they used to a few years ago. But the FOTLA is worth the extra money for onsite, IMHO.