The Swan and Dolphin resort is definitely on-site. The biggest differences AFAIK are:
You are not eligible to buy the
Disney Dining Plan in any form.
You can't use the Magical Express to/from MCO.
You can't charge purchases back to your room. (Not a bad thing necessarily.)
You won't receive free Magic Bands. You can purchase them for a nominal fee, but they won't work as room keys nor can you use them to charge back to your room.
You are entitled to Extra Magic Hours and you will be allowed to make ADRs and FP+ the same as other guests although I've seen conflicting reports about whether you get the "plus ten days" rule that applies to resort guests.
The resorts themselves are fabulous. The location is a huge draw, but having everything you need under one roof with indoor corridors is also a good reason to choose the Swan or Dolphin. Overall, they are luxurious hotels with upscale furniture, linens and toiletries. If you can get a good discount--and many are offered--you get a lot more bang for your buck than any Disney resort.
The in-room coffee is Starbucks. The butter in Picabu is Plugra. The towels are larger, thicker and softer than any you'll get in a Disney resort. Like I said, overall everything is more luxurious at the Swolphin.