I took my 5 year old son last October for the first time and his older sisters as well, we stay on site for the front of the line access, always worth the money, especially when busy. If you are considering 2 days you could always book one night and have 2 days worth of front of the line access.
As far as rides my son loved all rides of Seuss land, seeing and having picture made with spider man and watching the super hero parade with the can am motorcycles.
At universal studios the despicable me ride he did not like the moving seat, they have non moving seats in front and also in shrek ride just have to ask someone to move to those seats, the parades are really nice the floats come out about every 30 minutes and stop in front of Mel's dinner for a dance party, seems to me they have really stepped up their game in character interaction in both parks, Seuss landing always had someone walking and taking pictures and so did the Studio's side, their is a great playground and small coaster at woody woodpeckers that he loved, and a water soak park.
As far as rides what he enjoyed, his favorite the cat in the hat, one fish two fish, flight of the hippogriff, woodys rollercoaster. Animal actor show and all the dance parties.
I think 2 days is plenty of time for a 5 year old, all my kids enjoy the resort pools and activities so much we only spend about half our time in the parks and half at the pools.
The front of the line access will spoil you for all other parks, I love Disney to but I feel like the value at Universal is better for my family of 5, we stayed one night at the Animation resort last year at a cars suite and loved it but cost me $300 a night, although smaller the Royal pacific resort cost me $180 a night and I am not forced to stay in a suite because of family of 5.
If you like character meals we love breakfast at Ohana's and do it every year, we tried Universals version at the Studios, great character interaction, food not near as good as Ohana's, If you only have time for one stick with Disney for that.
Feel free to ask any questions, I have never been in July so I don't know about crowd size, we always go in early October when crowds are light and not as hot.