What did you hate about staying off-site at WDW?
If you stay at the FFI you won't have the transportation issues you may have had being off-site at WDW. In fact, I understand you can generally get to the parks quicker walking from an off-site hotel, than you could get to a WDW park from a resort via bus. So that wouldn't worry me, if that's your main concern.
If you didn't like the lack of magic when you left Disney property...the walk on Harbor Boulevard (which is how you'd get to the FFI) isn't bad, and doesn't scare me, but I wouldn't call it magical. You walk near a busy road (though there are nice sidewalks and trees) and you can sometimes pass homeless people sleeping on benches at the bus station. I don't mind the walk personally; it kind of quiets me down and readies me to go get some sleep before I go back and play in the parks again the next day. And sometimes you can get glimpses into
Disneyland through the fence, or even see a monorail go by! But walking out the GCH to get to the Paradise Pier Hotel is much more magical, and also has a nice long serene bit. (You do have to cross a road to get to the PPH, though.) I imagine the walk through Downtown Disney to the DL Hotel is equally nice.
If by Disney magic you're mostly thinking inside the room, well, I don't think the standard view PPH rooms are any more magical than a room off-site, unless you consider televised princess bedtime stories and a channel telling you how great Disneyland is to be magical. (And I ADORE seaside resorts, which is the theme of the PPH!) I did love the shampoo but you can buy it, I think even online.
On the same trip, my mom and I stayed at the Red Lion 2 nights, then the PPH standard view 2 nights. We actually both thought the Red Lion's rooms were as nice or nicer than the PPH's, and they were about half the price. (Though I did enjoy that pricey extra Magic Morning/Early Entry I got staying at the PPH.

This was back when they weren't offered daily.)
I am sure that, as others have said, a park view makes all the difference at the PPH. I'd definitely make every effort to purchase a park view room if you stay there.
Early Entry is a HUGE perk, but it's reportedly going to just be one park per day starting at the end of September. If that happens, Early Entry will still be very nice, but it will be a lot easier for non-hotel guests to see Cars Land (get to DCA early on a non-EMH morning).
Have a great trip!