We just got back from the Poly Lagoon View Concierge. We stayed one night on the second floor (Room 2502, they said that they did not have any first or third floor rooms available) which did not have a balcony. The view was great, but we really wanted a balcony or patio.
We were moved to the Room 3518 for the rest of the week, which we loved. The balcony was great. The view was wonderful. The castle, the Electric Water Pagent and fireworks were right there in front of us. We too were concerned about the smoking but there was absolutely no scent of smoke in our room, none. The only smoke we smelled the entire time was once when our neighbor was out on their balcony and that was just one whiff. The first floor is nice too, but I agree, I think that the view is blocked a little. I was also concerned that our sons might wander off.