While I go along with the idea to buy where you want to stay, that only matters when you are making your reservation with the home resort priority, currently 11-7 months out. I have had great luck getting what I want even on fairly short notice and quite often well into the 7 month period. If you are flexible with all the WDW options, your chances are even greater of getting the time period you want if not necessarily your first choice of resort.
Cancellation is pretty flexible. If you cancel more than 31 days out, there is no penalty. If you cancel 30 days-1 day, your points can be used again but only to make a reservation 60 days in advance of your travel. There are some considerations about how points can be used based on your Use Year....but that is getting into the "nuts & bolts" and I suggest you read the FAQ and then ask further questions.