If your MIL is on your room reservation, then she has to purchase the
DDP if the rest of you do. You mentioned your mother and brother being in a separate room, so they could decide whether they wanted to do the DDP or not on their own. Both being diabetic, I'm sure they have to watch what they eat throughout the day to keep their blood sugar on an even keel. The snack credits might be very helpful for them. Also, virtually every restaurant has a sugar free dessert item -- you can call ahead, or even ask if they can note it on your ADR's (some CM's will, some won't, I guess).
The DDP can be great with the kids -- the 2 YO is free, the 4 and 6 YO's would only be about $11/day each. It's nice to have everything prepaid, and be able to tell the little ones "yes" to snacks without thinking about it. You should look at the kids' menus for the TS and CS restaurants you would likely go to to see if your kids will like the choices, or if you would end up buying them something different that wouldn't be covered by the plan.
If you plan on one TS meal a day, especially if you would likely order more expensive entrees, order appetizers and/or desserts, or if you are doing fixed price meals like character meals and buffets, the plan usually at least breaks even, and would often save you money. MIL can eat wherever you do, but if it's a buffet or fixed price meal, every adult will pay the same no matter how much or how little each one eats.
With kids 6, 4, and 2, I would be totally planning a character meal almost every day! Of course, I love them myself, too

But there are so many great choices. Only CRT at the castle is 2 TS credits, all the others are 1 TS credit. There is 'Ohana breakfast with Stitch

; Princess Storybook at Akershus in Epcot (breakfast is American, lunch and dinner are Norwegian food, some love it but it's not for everybody); Chef Mickey's

; Liberty Tree Tavern; 1900 Park Fare (Mary Poppins and Alice for breakfast, Cinderella and friends for dinner); Crystal Palace for Winnie the Pooh and friends

; JoJo and Little Einsteins breakfast or lunch in MGM... You could seriously do a different one every single day. If your little ones like the characters (and aren't freaked out by them!) it's a great low-stress way to get pics and autographs because the characters come to
you while you are eating, instead of having to stand in line in the parks. And the grandmas might really love seeing how the kids react when Pooh Bear, or Jasmine, or Mickey come over to say "hi"
