The higher the room price and the fewer adults in the reservation the better it is to go with a room-discount than free dining. In our case, 2 adults and 2 children, staying at any deluxe resort, always works out better to do a room discount than free dining.
You can calculate it: get the free dining numbers ($42/adult per day and $11 per child per day). Add it. That's the per day discount with free dining. Compare it to taking 40% off your room rack rate (for pin) or 45% (for AP). Whichever one is higher is the better discount.
We are two adults, with AP, and we find discounts at the deluxe resorts are better than rack rate with free dining. We also have the Tables In Wonderland discount card, and find that better for us.
You have to run the numbers for your family.
We just got back yesterday, rack rate for a WL Standard Club Level Room at Peak Season is $555, we applied the 42% discount, and paid $321 for one night to treat DH for his birthday.