We have not yet taken friends kids to WDW, but I can see that happening very soon. Our older DD's joined us late on this trip because neither wanted to miss college or high school classes. Our DD9 really wanted someone in the pool and on the slide with her. I'm too old for the slide! And my DD19 turns 20 in January and she really wanted to bring her boyfriend on this trip.....but I didn't have enough points for another studio and didn't want a body in the living room. As it turns out my DD17 slept there so she wouldn't have to share a bed. I like the boyfriend, so that was not the problem. She wants to share Disney with him as we have had made many happy memories there. She had to settle on bringing him home some mickey ears.
We have, however, taken friends kids on our summer vacations....and it usually has worked out well. I have also taken friends to CA with us and have paid for everything except airfare. It was a choice on the parent's part to let their child go with us on vacation. I don't think the guest paying for airfare is unreasonable.
If we were to take friends, I would pay use the extra points for an additional room if necessary and would cover the dining plan. I would ask that they cover air fare and a park ticket.
I had a friend who went to WDW this past March and took my DD17 with her daughter. I offered to pay airfare and park ticket and more.....and she accepted reimbursement for the airfare and the park ticket. My friend does not enjoy the rides and was thrilled that my DD was there as entertainment.
I can also see in the not so distant future where another friend will ask to take my DD9with them to Argentina when they go home. And we will probably say yes. She has had my daughter on a beach vacation and I've had hers for the same. The kids do well for extended periods of time with each other. That's a key point when travelling with friends of your kids.
At 15 my family sent me to England and then Switzerland on the same trip to visit friends of theirs from Boston who both happened to be living overseas for a number of years and had kids my age. I had a wonderful time in London and skiing in Davos. I apparently behaved myself because the family invited me to continue on with them to Paris. But I said "no" because I had a band performance I didn't want to miss. To this day I regret that decision. I've been to Paris twice since then........but still it was such a silly reason not to go. I think it's great for kids to travel with other families. My folks were always inviting my friends to travel with us - although we never flew to Disney.
Anyway, my piont is that do whatever you are comfortable with. If you know the child and are confident the kids will get along more or less for that period of time - then go for it. But I would be uncomfortable asking for reimbursement for the cabin upgrade. You'll either have to eat it this time or maybe wait till next time to invite the child.