No crystal ball here so going on past experience (5 years running)...
1) Crowds are manageable. It is best to manage crowds by using park hoppers and leaving mid-day to avoid the largest crowds. Hoppers are nice to have as many nights are party nights at MK and the park closes at 6:00. Crowds on party days are usually very manageable, just hop to another park in the evening.
2) Your holiday will be much better if you stay at a Disney resort that has close proximity to MK or Epcot. These parks are most popular during the Christmas season and it is nice to be a short walk, boat, or Skyliner ride away, especially if hopping/leaving mid-day to avoid crowds.
3) The Christmas Party is a lot of fun but can be very expensive for a large family. I think it is worth doing once.
4) Learn how to master
MDE for same-day fast passes. We never get in a standby line of over 20 minutes yet are able to fo all the headliners over an 8-10 night stay. Not uncommon for us to get 8-10 fast passes a day, sometimes more.
5) Use Mobile Ordering. It is amazing how many visitors do not use it or do not know about it. Be sure you make ADRs at 180 days if you plan to have table service meals.
6) Because you are planning only a few days you will be at a disadvantage trying to do as much as possible with holiday crowds... it is much easier if you have a longer stay.
7) Do not concern yourself with capacity closures based on history. No park has had a phase 4 capacity closure in over 10 years. If staying on property you will be allowed into the parks, even if you get a park closure popup from Disney. The only people locked out are day guests, not resort guests.