A three-bedroom villa at OLCC should work out fine for you. The resort is huge, which some people find to be a negative, because you do need to drive to different areas or use their own internal transportation. We have stayed several time and the villas have always been spotless, in fantastic condition, very roomy, and the resort, since it is so spread out, is very PEACEFUL after a busy day at a theme park!
I don't know anything about county code in regards to how many people can stay in a 3-bedroom, but I can't imagine that OLCC is doing anything against code. Maybe it's because the 3 bedroom is really a 2 bedroom with a 1 bedroom lock off unit? Our 3-bedroom had a king size bed, bedroom 2 had 2 queens (may be a good choice for the 4 kids in your party), another really nice bedroom with a queen and love seat that pulled out into a couch (this is what they call the lock off unit) and a pull out couch in the living room.
OLCC is really really really nice at the end of the day...and it has so much to do there that if you need a down day just hanging at the resort, you will be very happy.