We are long time HH Christmas guests. My 11 yo doesn't remember anything different! Santa always visits the day before (and if you go his elves will bring your children a special gift on Christmas morning)! It's a very peaceful, quiet way to spend the holidays. The one year we thought we'd stay home, DH and I were miserable. Didn't feel like Christmas to us unless we were at HH!
There are enough activities at the resort to keep from being bored, but we also like to spend plenty of time walking the beach and riding bikes around the island. It can be pretty cold/windy, so ear muffs or a good hat are recommended, as well as a rainproof jacket and maybe gloves.
We're from the south, but we see plenty of folks from "up north" in the heated pool.
As far as Christmas dinner, we always have ours in our room. However, there are many local hotels that offer a special meal. There are also local restaurants that stay open on Christmas. The front desk gives you a list when you check-in.