These are some things which I would highly recommend during your stay:
Magic Kingdom - the Christmas parade, it is very different from the regular parade. Last year it ran 2x a day in the afternoon (I believe it was at 12:30 and 3:00 p.m.) between Christmas and Dec. 31st. The regular parade was back on January 1st.
MGM - the Osborne lights are not to be missed. I believe that this started at 6:00 p.m. each night. We skipped lunch, had an early dinner (around 4:30 or 4:45), then went over to see the Osborne lights and after that, Fantasmic.
Epcot - the tree lighting/Lights of Winter, which I believe is at 6:00 or 6:30 p.m. You already know about the Candlelight Processional, which is great and highly recommended. During the day, you should try to see the storytellers in the various countries. They appear several times a day. You can get a schedule at guest services when you enter the park. DS and DD really enjoyed them.
We did not want to take the time out during the middle of the day for table service lunches. We typically have an early breakfast and a table service dinner. In between, if the kids are hungry, we will just grab a hot dog or something from one of the counter service places. However, if your family would like to have a TS lunch, ADRs during that week are a must.
One more thing - if you are
DVC members and have children, you should try the Merry Mixer - they have cookies and cider, and several characters for the kids. (My DD had fun dancing with Goofy and the Reindeer from the MK Christmas parade.) We also saw Minnie and Mickey together in their holiday outfits - adorable!
Good luck, and have a great trip!