I would suggest a late lunch/early dinner because you want to be there early.  We waited until later in the evening for our photo and really wish we would've done it first thing - we did not look very good!
We watched the 2nd parade in Liberty Square outside of the Hall of Presidents (right where the parade rounds the corner).  We got our seats about 15 minutes before parade time and could've sat on the curb (we stood and let kids sit on the curb! 

 )
Be sure to be in front of the castle for the fireworks.  You will get a list of shows and times.  Be aware that some are the same as the daytime show (IE Country Bears), so don't waste party time seeing those.  
Also, if it rains (it did on us last year), be sure to go to guest relations and see about getting tickets for another night.  Our first party night we rode the rides in the rain, but none of the shows/parade/fireworks were held.  We were able to get free tickets for another night.  We came back and had a great time!
The cookie and cocoa lines were usually not unbearable, even though they are not very good.  It was cold when we went, so it was nice to have something hot to drink.  Sometimes, the area appears to be crowded, but most of the time there are several tables in the room and the line goes fast (grab a cookie, grab a cup of cocoa and walk off! 

 )  Most people stand around to eat their cookie, so it will only "appear" to be crowded.
Another piece of advice - make sure you have sweaters and jeans.  My DH and I are not cold people by nature; however, we were in sweaters and jeans and were still cold.  We brought gloves and that helped, so be prepared!
 
I also agree that during the week is better.  I think Friday/Saturday and even Sunday are busy.  Our first night was a Thursday and it wasn't busy (it was RAINING, though).  We went again on Sunday and it wasn't that bad, but it was busy and there were some lines.
Sorry this is so long, but I hope I answered most of your questions.  If you have any other questions, let me know and I'll be glad to help!
