We just really wondered if we had missed something by being on the "doorstep" but not actually on-site!
In my opinion, yes, you are missing something. I never understood the "magic" thing until our first stay on site, and that was at the All Stars. Now I understand.
Disney will be more expensive. Disney will probably have less room. But I would still stay on site, especially if you haven't before.
Our family has stayed at the HIFS (now Nick hotel) which is about 1 minute driving distance from the WDW gates. We've also stayed at Wyndham Palms which was a full 2 bedroom, 2 bath condo with big screen TV. But when I ask my kids and wife where they want to stay, the answer is always a Disney hotel, even if it means my kids end up sharing a bed.
I agree with others, a split stay would be best for this length of stay. However, if you 've never stayed on Disney property before, I would spend at least some of the time onsite.