For me I pick the DLH. And since I am staying on points (DVC) the money was not an issue for this trip. So we decided that since we hadn't been at the DLH for a couple of years, we would go back there vs. the Grand again. I love the light, bright rooms with the Disney touches, the grounds, the larger rooms and just the overall feeling. However, the last time I stayed there, I hadn't stayed at the GCH yet, so I might feel differently? Also, the hotel is older, and now that I have stayed at the brand new GCH, that might be more obvious to me. So we shall see if I still stand my decision after the fact in a few weeks! As far as the GCH, I loved it. Location was great, it had more of a deluxe feeling hotel to it. The lobby is beautiful, however other than walking through it each day, we didn't spend much time in it. The grounds at the DLH however we do appreciate and enjoy and missed those during our GCH stay. The room was a bit smaller than the ones I have in my five stays at the DLH however, not in a way that made me feel like we were in a cave. And it had a nice balcony with a couple of chairs, so that gave some add'l room. DLH rooms do not have balconies. They do have floor to ceiling sliding doors/windows where you can sort of put a chair to enjoy the fresh air and views but not a true balcony.
I will add is at the DLH, all rooms come with some sort of third bed option. Either a daybed or a rollaway. And actually you can have both, if your room has a daybed you can still request a rollaway (and rollaways are free at the DLH). So in that case, its possible all three of your kids could have their own bed. At the GCH, some rooms have bunkbeds with a trundle, meaning, three kids could also have their own bed. However, they are a bit short, my 12 year old was getting close to having his feet touch or hang off the bottom a year ago. Some rooms at the GCH have a daybed and two queens. However some rooms, have two queens, nothing else. In that case you receive a sleeping bag and mat for the third kid to sleep on. For some families thats not acceptable or desireable, in which case the DLH is the better choice. I will also add that Paradise Pier, the other onsite Disney hotel has daybeds in every room (no rollaways available there). And its always the cheapest of the three hotels. And I like it very much too.
In all, I think the pluses and minuses to each hotel are even in the end. You and only you can know if the pluses for your family fall into one hotel's category or the other. I think in the end you cannot make a wrong choice, they both have so much to offer!
Flattfamily5: The DLH generally has large rooms. There are a few that are a bit smaller, you may have gotten one of those. Or it may be like so many other things in life, the more you hear about something, in this case large rooms, the less likely it is to live up to the hype. I think the reason that the DLH rooms are larger is that the hotel is older. It seems to me that when I stay at any hotel that is newer than say 10 years, the rooms are small, whether its a Disney resort or another chain. At WDW for example their two most recent deluxe level (Animal Kingdom and Wilderness Lodges) resorts have smaller rooms than the original Deluxes built at WDW. So in essence, the large rooms might just not be that large to you if you have stayed in other properites that feature large rooms or suites. I would call the rooms at the DLH spacious but not huge as a rule of thumb.