If your little one does well being out of his element (sleeping somewhere else, eating at off times, etc) I'd definitely go for the 10 nights! It'll give you plenty of down time and you won't have to rush! We were there for 2 full weeks in Dec with our almost 5 year old and 2 year old and we had a great time. We had 10 day park hoppers plus did the x-mas party another night and then had some down days (did Kennedy one of those). We often would either go to the parks at opening and stay until maybe 3 and then head home or, some days we'd do other stuff in the morning and then head into the parks late afternoon and do evening entertainment. The park hours were pretty short in Dec and taking mid-day breaks every day was hard because of that so that's why we did 3/4 days a lot of time! We hit the pool a few days which was a blast, toured some of the other resorts, had plenty of time for DT disney, etc. I honestly think we could have stayed longer and it wouldn't have been too long. This was our 2nd trip to WDW but we go frequently to DL. I think my only thing with staying longer is that we had a condo for 1 of our weeks and not eating out all the time was kind of nice (both on the budget, our diets, and our sanity)!
Alison