We just got back from HH after a week there in a 2 bedroom. It was not crowded at all.
They are repaving some of the pathways and are sealing the blacktop drives and parking lots - it's kind of a nuisance but they might be finished by the time you get there.
We went to Savannah on Sunday and it was marvelous there. We didn't take a trolley tour, instead we parked for the day ($5) and walked down by the waterfront on the cobblestone streets and visited all the neat shops there before going back to the car and driving on to Tybee Island and seeing the Lighthouse. It was sunny and nice all day!
The Beach House is closed for the season (as is the restaurant there) but you still have access to the pool by the beach and the beach itself - although when we were there it was deserted - much too cool to be around the water with that 25 mph wind and 60 degree temps! Two of us came back with colds.
The resort itself has a magic show and campfires your kids might like - they'll give you a paper showing all the activities when you check in. Understand that in off-season there isn't that much going on ANYWHERE. The mercantile closes early and the pool/jacuzzi area closes (is locked!) by nine each night.
If you can, request a first floor room since you have little kids. All those stairs will get old - fast. The Piggly Wiggly is just up the road - it has everything you'll need. They provide you with dish detergent, a tiny box of Tide, dishwasher detergent and plenty of cooking utensils, dishware, glasses, silverware & pots & pans. Contrary to what I'd read, they also give you a Teflon skillet.
You might want to bring a strand of patio lights for your balcony. It gets dark if you're not facing the pool area. They're not expensive and wouldn't take much room to pack. That was one thing I wish I would have brought with us.
If your wife likes to shop, do the factory outlet stores one and two just before you get into Hilton Head itself. A reminder, some things are hard HARD to see behind all the trees - HHI has a very strict building code that prevents billboards and neon signs. You get used to it quick, and it's a great thing, but for us outsiders it's something you have to get accustomed to seeing (or not seeing).
Have fun and I hope the weather stays pretty and warm.