Our first family trip (with DS5 and DD4) was in Aug '07. The crowds were definitely there, but I thought that they were manageable.
For Fantasyland, I would definitely take advantage of the Magic Morning early entry. The only downside to MM is that it starts so early. In the summer, DL's regular opening time is 8:00am, and MM starts at 7:00am. Since it's a good idea to be at the DL/DCA entrance area 30 minutes early, that means you would need to be at the entrance at 6:30am. DL's Fantasyland rides have no FastPass, and some of the longest lines in DLR will be for Peter Pan, Dumbo, Matterhorn, Alice in Wonderland, Mr. Toad's Wild Ride, and Mad Tea Party.
(But it's common to see these 6 attractions (and more?) during a Magic Morning.) Here are 2 excellent threads about Magic Mornings:
"Critique of MM/EE" by Hound 109
www.disboards.com/showthread.php?t=1392671
"Magic Morning (Early Entry) Super Thread" by DLR29
www.disboards.com/showthread.php?t=1675403
I hope that your off-site hotel is within walking distance to the DL/DCA entrance. Being able to walk to DL/DCA in 5 to 10 minutes is very convenient. The following thread is about walking-distance hotels/motels:
"HydroGuy's Hotel Rule"
www.disboards.com/showthread.php?t=1199862
Unlike WDW, where the fireworks are almost never canceled, at DL the fireworks can be canceled due to winds aloft. For that reason, it's best to plan to see the fireworks on your first night, and not save them for your last night. Here's another HydroGuy thread about the fireworks:
"HydroGuy's Fireworks Rule"
www.disboards.com/showthread.php?t=1199851
During your trip you should see Fantasmic and the Electrical Parade (in DCA) on separate nights.
Your 5 y/o may like the Jedi Training Academy. Here's another good thread about JTA:
"Jedi Training Academy Tips" by Hound 109
www.disboards.com/showthread.php?t=1478699
My DD4 loves getting autographs from characters. She was hooked the instant she saw another child getting autographs. It might be a good idea to buy an autograph book as soon as you can. Our books are filled with photos and they make a nice keepsake.
I recommend all of the threads in the HydroGuy Tips Compilation sticky (at the top of this forum), especially the FastPass threads.
Here are 2 more HydroGuy threads:
"Getting The Most Out of a Summer Visit To DLR"
www.disboards.com/showthread.php?t=1345319
"A DLR Guide for WDW Vets"
www.disboards.com/showthread.php?t=1162599
For touring information and getting ideas for itineraries, I highly recommend
www.ridemax.com. I think RideMax is a very good planning tool, and it costs $15 for 3 months ($25 for 1 year).
Is there any chance that you can stay in DLR a 4th day? I'm of the opinion that 4 days is better for a first trip.
This DISboard should be able to answer nearly all of your questions.
HTH
