I just wanted to offer you some advice about DC and Williamsburg- we live in Williamsburg and travel to DC a lot! Both areas are WONDERFUL for kids, and there is so much to do.
DC- We always stay in Arlington- short drive or ride to DC, and King Street is very nice (shops, candy store, restaurants, cobblestone, etc). Since I like all of the nicer hotels in the area, I usually priceline Arlington and end up around $75 a night. Parking in DC is not terrible, but it can be tough to find a spot. Weekends are a cinch- park in the Reagan building for free, 2 blocks to the Smithsonian. We also park at the zoo. Bought a family membership for $55 (I think), and we get free parking, a stuffed panda for joining, free snacks for the kids, a discount in shops/restaurants AND free admission to most other zoos in the country, including the one near our home. All of the Smithsonian museums are wonderful, and the food at the Native American history museum is really good.
Williamsburg- You can find an inexpensive hotel. Almost all areas are nice and very safe, but avoid 2nd Street. Anywhere on Richmond Road is right in the middle of everything, and you can drive, walk or catch a bus to a lot of places. Colonial Williamsburg is beautiful, and there are lots of activities for kids. Yorktown is interesting, and there is a great little beach. Jamestown is FUN for the kids, and they will have a blast playing in the village and climbing on the ships. I'd skip Busch Gardens, unless you love big roller coasters. There are some cute areas for kids, but it is expensive for what you get. Water Country is a lot of fun. The Virginia Living Museum is just 20 minutes away, and it is a wonderful nature center that highlights the animals found in VA. They have both an outdoor walking trail and two stories on indoor exhibits. VA Beach is about an hour away, and there is a great beach, as well as an aquarium. Food prices are no higher here than anywhere else- lots of chains, as well as some great local eats. In the summer, there is a Saturday market that is a lot of fun. We also have outdoor movies in the summer (I think on Sundays).
If you have any questions about either location, I'd be happy to help.