Okay, there are lots of benefits to staying on site:
1. Magical Express bus takes you and your luggage to and from your Disney Hotel and Orlando Airport.
2. You can add the meal plan to your visit, which allows you to eat at any of the disney restaurants (1 Table Service Meal, 1 Counter Service Meal, and 1 Snack per person for every night of your stay).
3. No parking, no driving...take Disney transportation (buses, boats, monorails) to and from the parks and hotel!
4. Extra Magic Hours - guests staying in Disney Hotels get into the parks 1 hour earlier on certain days, and as much as 3 hours later on other days.
But what you need to do is check out the hotel prices off-property, then add in meals, and car rentals, and parking fees. Then go to the Disney site, and check out the total cost of a room, with / without meal plan, and weight the difference in the price and see which one fits into your budget. There is a lot of information here on these boards that can help you out, and also go to Allearsnet.com and check out what information they have. It will be up to you to decide what is best for your family, but no matter if you stay on or off site, you will have a very Magical Vacation! Enjoy!