As others have said, The Grand California is not "in the park"--and is only a very short straight walk to the Disneyland Hotel. They are both directly off of the downtown Disney District--you won't have to cross any streets or leave the Disney area. So that is not really a reason to choose the Grand California.
We have stayed in both, but like the Disneyland Hotel much better. This is one of those personal choices, and your view may vary. The reason we like the Disneyland Hotel better is that to us it is more "Disney-ish" for the kids, it has taller towers so you have amazing views, and most of all--the rooms are much larger. We have 3 kids and we were incredibly cramped in the Grand California (we got one of the rooms with bunk beds). The decor is pretty dark (to look arts and crafts style) and although we paid for a view room, the hotel is not very tall (I think it is like 4-5 floors?) the view was minimal. It was noisier than our high view rooms at the Disneyland Hotel as well. The Disneyland Hotel seems lighter, brighter, has the Disney theme that we all like, and has lots of extra space around the bathroom with an extra area to store luggage and put on make up and fix hair that is out of the actual bathroom. There is a nook with a mirror, table, lights and outlets that I love for doing my stuff in the morning, as well as fixing my girls hair.
We go back to Disneyland so often that the Disneyland Hotel seems so happy and familiar to us.
Hope that helps.
Lisa