Actually a 1BR and studio is a 2 BR but for less points if you designate it 2 BR. You would have the master BR, 2nd bedroom with sofa bed and queen bed and sofa bed in living room. You then also have everyone together rather than chance being on different floors or at the other end of the very long hallway -but based on some other posts lately maybe that is a good thing(not having them right next door that is.) Of course at this point you may not be able to change anyway. The studio should be fine for three. They probably won't be in it that much anyway.
Hope you have a wonderful family trip.
To Granny - absolutely - he would have had a ball with it.