I know everyone says to take those midday breaks but we don't. Well, we do take a midday break, but we don't take that break by going back to our hotel; we do something relaxing that gets us away from the stimulation of the parks. Examples are lunch at WCC at WL via boat, a long stint at the Living Seas in Epcot, park hopping by taking the boat from DHS to Epcot, spending a leisurely lunchtime at a restaurant in the parks, or leaving a park early afternoon and going home from there.
Just to give you a sense, here's the process of leaving MK, from my family's perspective:
Get out of whatever land we're in, past whatever rides we have to get past, to the circle in front of the castle. Be jostled by crowds.
Walk down main street past a gauntlet of stores and vendors.
Walk through dark tunnels to entrance.
Leave park. Decide boat or monorail. Wait for boat or monorail.
Get on boat or monorail, along with a big crowd. Get off boat or monorail, with an even bigger-feeling crowd all pressing to get off.
Walk to tram and get on. Ride tram (with loud announcements, etc.) to parking spot, walk to car, get in car, get seat belts on.
Drive home.
PHEW. The other parks aren't quite as bad (skip the boat or monorail), but we usually end up with a major meltdown at some point during that process. For our family, we're better off doing something nearby until we're ready to be done for the day. YMMV.
Honestly, staying onsite would be no different, because we'd have to do half of that and then get on a crowded bus and I'm sure you can imagine how much fun that would be for EVERYONE involved. This year we're spending a few days (at GREAT expense) at WL to see if that makes it a lot easier, but we can't afford to stay at an MK deluxe all the time. I'm paying rack rates and it's making me a little queasy, even just for three nights!
This time the kids are a little older so we're going to attempt fireworks and a P&PP, but I'm not sure it's going to work and I won't buy my P&PP tickets until we're at the park with everyone in good shape, ready to go, and we've attempted a fireworks night at Epcot and have been successful. Last year fireworks were just not park of our Disney world experience. The same may be true this year. I didn't think we could do Disney at all with my son, and it went great despite a few bad moments, so I'm just glad we were able to go.
I hope you have a great trip!
C
PS: ETA that I agree with mazz1 that there are a lot of really good reasons to stay offsite. We haven't done a villa yet, but having that extra bedroom makes a world of difference.