I love all three DLR onsite hotels and have stayed at them all. But I have to say the DLH is my favorite. With a two year old in particular, I would go with the DLH. The slide at PP is very cool for older kids but the pool itself is a boring, square, hotel pool. The DLH is great for littler kids and there are more food options at the DLH as well. And it is closer to the monorail station in DTD. Although PP isn't that much further.
The DLH has some very pretty grounds. Be sure and check out the fountains, Koi ponds, and the remote control jungle boats. The DLH also has a small laundry room, PP does not. Hopefully for two days you won't need it but as a parent of a toddler, well you never know!
While the DLH rooms don't have balconies, they do have sliding doors that allow some fresh air in. PP rooms do not. Only the GCH has balconies. And even though its the most deluxe in feel and is attached to DCA, I still prefer the DLH. There's just something about that hotel that really does it for me!
Also, leave your curtains open during the day, there is pixie dust wallpaper that glows in the dark if you charge it up with sunlight.
The onsite DLR hotels aren't the same feel as the WDW properties but they are very nice. And the DLH is really the only one that has grounds. Goofy is also frequently in the lobby area and I agree Goofy's Kitchen is wonderful for food and characters. I also love that Lilo and Stitch breakfast at the PP and its about a five minute walk to get over there.
If you are doing one room for that many people, I couldn't recommend the GCH. The rooms are much smaller. At the DLH, the rooms are bigger, and your are guaranteed either a daybed or rollaway (free). At the GCH, if you need a third bed and don't get a bunkbed or daybed, you get a sleeping bag. If you are getting two rooms, than the GCH is very nice. I don't find the walk that much closer to DL as many of the rooms are located down long hallways and can be aways from the entrance. By WDW standards, all the hotels at
Disneyland are close, easy walks.
Have a great trip!