For my family,
DDP is worth it. YMMV. I like it because that way the food is already paid for, and there is plenty of it. We are taking my Inlaws after T-giving, and even though MIL doesn't eat a lot, I'm still booking them on the DDP because it reduces the stress when the check comes (or when ordering - she does this by looking at the price before looking at her meal choices). It helps us budget - we know once we get there that everything is paid for, we just have to have $$$ for souveniers. If you get the DDP, everyone in the room with you has to have the same package.
It isn't cheap - adds $40/night per adult (over age 10) to the tab, but allows us to eat in nice places every day for a lot less than we otherwise would. For example, on our last trip, we went to Coral Reef to celebrate our anniversary. We had crab claws and shrimp cocktail as an appetizer. DH had a NY strip. I had pan-seared Ahi Tuna. DD8 had salmon. We all had dessert that was to die for. Had we been paying for this meal out of pocket, it would have been $165. So on that meal alone, we were $75 to the good for the day on the DDP, plus that doesn't take into account the 3 snacks and 3 counter service meals. Granted, we probably would not have eaten there without the DDP, but you can see how the plan allows you to eat well for considerably less than if you were eating the same meals and paying cash.
You can get more info on Magical Gatherings by calling 407 WDW MAGIC. You can book an exclusive event (fireworks cruise, sunrise safari) for an additional fee, but an event only open to groups.
Another benefit to staying onsite is Extra Magic Hours. Depending on when you go, this can really help you beat the crowds. Last September during the day, Pirates had a 75 minute wait. That night during EMH, it was a walk-on. It also lets you have a more relaxed pace - the kids can sleep and still have plenty of time to enjoy the parks.
This trip sounds like it is going to be a lot of fun, even with its challenges.