For a character meal you have to do Chef Mickeys. This is a classic, your kids will love it! DM should also like it because there is a large selection of food, as are all WDW buffets. Crystal Palace, 1900 Park Faire, Cape May Buffet, LTT, all also have nice character meals, but for a fun atmosphere with the characters, you can not beat Chef Mickeys.
'Ohana is a great place for families. It is all you can eat and there is entertainment and kid's activities. Very fun place. Very good food also. We just love their peanut dipping sauce--yummmm!
HDDR is another great place for families. It is a little pricey but includes a fantastic show, that your 5 yo will love, another WDW classic.
Some of our favorite park counter service places are: Flame Tree at AK--unbelievably good ribs; Columbia Harbor House in MK, the bakery in France for a fruit & cheese plate or croissant; Morocco, Germany & Norway's take outs for the sandwiches.
Some favorite sit downs are: 50's Prime Time --fun, fun place; Mama Melrose--good food, nice cozy atmosphere; Kona Cafe--very good food especially breakfasts; Big River Grille--love their meatloaf--fantastic, sit outside for a very nice atmosphere.
We also really love: Flying Fish, Cal Grill, Brown Derby, Artist Point, Yachtsman Steakhouse and Jiko, but these restaurants are more geared to adults. Although children are more than welcome in any WDW restaurant, some have more things/atmosphere, etc that appeals to little ones, then others do.
Have fun eating your way around the world of Mickey! It is one of our favorites parts of a WDW trip, LOL!