DH just made me cancel the WL trip I've been planning for months because the Ctyd is offering $39/night when we're there next week.
I'm bummed about not staying on-site, just bc I've never done it, but we've stayed at the Ctyd before, and it is nice, clean, and a bonus for us, close to DtD. I wasn't thrilled with the bus service, but I've heard worse about Disney's bus service than what we had with the Ctyd. And, we can get a rental car and stay at the CTyd still for $300 less than WL. So, I'm glad just to be going to WDW!
It's totally up to your family's preferences, but with a 2.5 yr old, I'm guessing afternoon naps will be part of the trip. If you can get the ctyd and a rental car for less than a Disney hotel, go for it! Or, if the Disney hotel is one of the "further out" (like All Stars), maybe go for the ctyd if its close in price.
Hope you have a magical trip!