Congrats on your upcoming trip!
Parks should be open late all summer, so you'll have lots of time in a day, which should make up for the longer lines. All of the shows should be up and running too (Fantasmic, fireworks, etc.).
I would allow at least 3 days if you want to cover everything at a normal pace. I spent 4 days there last October, and it was very nice to take things slowly and not feel like we had to rush. Things close a lot earlier in the fall though. You can probably do DCA in a day. DL can be done in a day if you rush from ride to ride, but personally, I wouldn't be satisfied with any less than 2 days at DL.
As far as staying onsite, it's not as much of a "must" as it is in WDW since there are tons of other hotels that are just as convenient and less than half the price. However, let me say that if I could afford to, I would stay at the Grand Californian every trip! I stayed at the
Disneyland Hotel once, and that was pretty good, but last year I stayed at GC and totally fell in love with it! It reminded me of the Wilderness Lodge.
But, as I said, it really isn't a "must." I like the Howard Johnson across the street on Harbor. I've also heard great things about Desert Inn and Suites (might be good for the size of your family), which is right across the street.