Hi,
You buy your passes when you get there - as everyone who gets an annual pass needs to have their photograph taken for the photo ID pass, and for the free one (for your 4-year old) they will need to see proof of her age (I took my DD's passport).
When you get to the park - go to the right of the turnstiles and you'll see an office titled "Guest Services". You can pay for your passes there, and then sometime that same day, you go to the Annual Pass office at the top of Main St USA, to get your permanent photo ID passes.
You can also get sponsorship on the other adult pass, and your 7-year olds pass. This would give you 10% discount on those 2 passes.
So yes, you would pay for one adult annual pass, and get the same type free for your 4-year old.
Then you would pay for a pass each for the other adult and your 7-year old. The passes are the same price for adults and children 7-and-over.
Elaine