For my son and I it's simple...
this is the park that Walt built, the one he walked through, the one he dreamed of and fought for. It's magic.
Make sure to look up at the window over the Fire Station. There will be a light glowing. It was his private apt. in the park. We always say "thanks, Mr. Disney" when we leave at night.
As for staying off-site - don't worry. In my opinion staying on-site does not guarantee the total immersion feeling. It's in you and your family. I'm a teacher and single parent so I know the budget thing and for the past ten years we've stayed at HoJo's the week after Thanksgiving and have never had a negative experience or time. We have always felt safe with walking back to the hotel - along with lots of other families - and the nearby eateries such as Mimi's and Millie's are great.
Go with an open mind and let the magic happen. And sometimes just going with the flow is when you truly experience it. Have a great trip!
We do this too!! Maddie, you've gotten a lot of good advice here.
I'm on the East Coast and have been to WDW 5x and DL 6x. My DH has told me he has absolutely no interest in going back to WDW because, in his words "it's too big, it's too exhausting, you spend too much time trying to get around and it's too *** hot and humid." But, he loves, loves DL and is always happy to fly across country to go.
We've stayed both off-site and at the DLH, but to our family, the Grand Californian is the only place we'll stay now, it's so beautiful and makes the Disney experience so special. We also must have one dinner at the Napa Rose, which to me is the best of all of the Disney Restaurants (haven't been to V&A, but it's much better than California Grill in WDW).
We normally do DLR for 3 1/2 days and then hit somewhere on the coast for another few days, either Laguna Beach, Santa Barbara, San Diego, or even Santa Monica where your relatives are (beautiful!). If you are in the midwest, you really should not leave California without spending some period of time at this state's gorgeous coastline with the most amazing and breathtaking views.
Don't overlook going into LA to visit Universal tours and then off to Grauman's Chinese Theatre to see all of the handprints and footprints of legendary stars (even my 16 year old was in awe when she saw Marilyn Monroe's). Maybe have a lunch at the legendary Spago and walking on Rodeo Drive.
These are all things that cannot be done at WDW, but are all part of why my family now prefers Walt's original park. Relax and have fun!!