My twins are now 3.5 years old. They went into beds well before two, as they are very large (35 inches tall, 35 pounds). On holiday, they cannot sleeps together, as they play constantly. Only in the past six months can they even sleep in the same room while on holidays.
Now to your question. If you must, I'd sleep with the little ones and keeps them separate. I'd still get bedrails, as the bed are high and my dd, 9 had a serious fall out of one last year while at Disney. Would not have predicted that.
We'd probably go for the cribs though. It would enable me to move the kids around if need be. You could push the two queens together to free up some space, although I love the idea of a 2BR lock off. We did the lock of with my sister and it really provided more privacy for all, plus the extra kitchenette.
My twins would not fit in a pack and play past the age of 18 months, although you may not have kids as big as mine. The pack and plays are certainly more compact.