Yes, it is very crowded, but so is June, and honestly, I'd rather go back between Christmas and New Year's than ever go in June again. In fact we are going back then this year. We went for NYE in 2002/2003 and yes, it was packed, but the weather was cool (cold some nights, but not unbearably so) and the Christmas decorations are up, the characters have their holiday attire on, the parades are Christmasy, etc. June is crowded, but also unbearably hot. We were there June 7-21 last year and have vowed to avoid summer trips in the future if at all possible. It was almost as crowded as Christmas, but so hot and humid that we were miserable. We actually left the MK on our last day and just went back to the resort and sat in the a/c lobby.
We got up early every day for EMH (only in the mornings back then) and that was at 7am for most parks. We'd stay from around 7am-noon, then eat lunch (we had PSs for everyday, 2 meals each day, and you do need them) and go back to the resort to nap/rest. We stayed at AKL for the 1st 4 nights so we'd spend some time on the balcony looking at the animals and just relaxing in the room. We moved to the GF the last 4 nights and there we'd sometimes rent little boats, walk to the Poly, etc. So we'd do that from around 12 or 1pm till around 5 or 6pm then head to dinner and back to the parks till around 11pm. We'd shower when we were in the room before dinner, which was also very refreshing after a tiring, crowded morning, plus is saved time late at night or early in the morning.
So we're going back this year, probably arriving on Christmas and staying till NYe or a few days after. And this time we'll have our daughter with us, who will be 22 months old. Last time it was just me, my husband, and my mom, but if we're willing to do it with a toddler it can't be that bad, right!?!
If you go with a PS for every sitdown meal you think you'll want to eat you'll be fine in terms of meals, plus you can schedule them for off times so that you have park time while the majority of the crowds are eating (remember, you can always cancel them at no charge, except the ones on the actual holidays, those require a credit card guarantee, $10 I think). To beat the crowds in the lines, get up very early, get to the parks are opening, and ride all the big attractions right away, then when the big crowds come in move onto the other rides/shows that aren't as popular. What I mean is, if it's an EMH morning, hit Space, Buzz, and Fantasyland during that 1st hour, then head to BTMRR and Splash, then the rest of the morning do whatever else it is you want, eat lunch, go back and nap/rest/shower, then eat dinner and go back out to the parks. Lots of the little ones are sleeping so it's not too bad to get on most rides. Of course, if you stay offsite I don't have as many suggestions cause we didn't do that and I would think you'd need a different strategy since there's no EMH then. Also, the parks close to offsite guests but remain open to onsite guests so keep that in mind too. I promise you can have a good time and not feel totally overwhelmed by the crowds!