With non-Disney properties, rates can vary greatly. Even considering resort and parking fees, $500/night is a huge budget.
For example, if you wanted the convenience of walking to Cirque du Soleil, you could stay at the Hilton Buena Vista Palace. The following are prices for 2 adults and 3 kids (under 18) for a 1-bedroom suite in their Island Tower. It's 800 square feet with two queen beds in the bedroom and a sofa bed in the living room.
Link to hotel site:
http://www3.hilton.com/en/hotels/fl...palace-disney-springs-area-MCOBUHH/index.html
These are non-refundable rate, but the refundable/cancelable rate for that suite is $132. There's a $25/night resort fee. That makes the total including tax for two nights $353.25. (There's also a $10/night fee for self-parking, if used.)
The hotel has restaurants, but you can also easily walk to Earl of Sandwich, Wolfgang Puck Express, and Rainforest Cafe.