Hi Ken,
As Doctor P has stated, this topic has been discussed to death on this board. Many of the membership have very STRONG feeling both ways on this issue. As a result, this topic tends to become complete out of line with the posting guidelines, thus I am going to lock this topic. Feel free to do a search on the board for other post on the occupancy issue.
Yes you will be violating the occupancy limites. Will Disney check your room to make sure you are within the limits, probably not. Should you do what you are planning, the final decision is up to you.
******UPDATED*******
Windjammer reminded me that technically, if you could secure a Studio Plus, you would not be over the limit. (Be advise, I am not sure that MS will guarentee you a Studio Plus)
This would put the 4 adults in the beds, the 6 year old on the day bed and the 2 year old in the pack-n-play. My only point here is that with the day bed option, there really is not room for the pack-n-play to be set up and for people to manuver around the room. (I can see myself breaking a leg, trying to get to the bathroom, in the dark at midnight)