As for where to buy, others will tell you to buy where you want to stay.
As for the size of the contract to buy, I have yet to meet a
DVC family that stayed with their original plan when buying in. Once you do this, you'll realize how easy it is to go even for just a 4-5 night stay. I can only do one trip with my DH, but I will go with just my youngest DS this summer, and the whole family will go next November.
When we purchased, I did not plan on going this often! But then we bought annual passes, and once you have them, you might as well maximize them. I also thought I'd drive most of the time, but we found great airline deals, and DH used miles for our November trip. Then I got the Disney Visa card, and it was really easy to put a small add-on to our contract right on that! That led to us getting a voucher for AP's for next year, so now I'm planning out our trips for next year to maximize the vouchers we'll get then....
And it may never end. I have so many possible trips planned now, my head is spinning. DS and his friends, Dsis (x2) and me, maybe DH, I and his parents, maybe a trip with DH, DS, myself and my niece...and that's before I think about MY friends that would love to do a "girls only" trip...
Guess what I'm trying to say is...plan the place, get the points you can afford, and don't rule out the travel plans changing...or rather, the frequency of them....
Above all, have a great time! If you love WDW, you won't be sorry you did this! Just wish we'd purchased sooner....