OK, going in July. Yes, it is hot. Very hot, and very humid. Yes, there are a lot of people there. And that includes tour groups from other countries who can fill an entire bus by themselves (and often do). And yes, it is easy to get cranky in all that hot weather. And yes, the daily rain shower is a definite possibility, though not a certainty.
But not, it is not unbearable weather. Nor are the crowds so bad that you can't move (but stay out of the way of the tour groups!). And your attitude is up to you, weather or not.
Honestly, we've been in July the last 2 years, and have had a fabulous time. We have stayed at the AS Sp both times, and loved it! We aren't the typical family that stays in the parks for a few hours, then comes back to the hotel for the afternoon, then goes back to the parks in the evening. If we wanted to stay in the hotel for any part of the day and just swim, we can do that anywhere. We're at WDW, and want to enjoy it. And contrary to popular belief, you DON'T have to come back to the hotel near lunchtime to be able to make it through a whole day in the parks, even if you do have kids (DS8 and DD 5). My kids love to swim, but don't want to take up park time to do it. When we get back to the hotel at night, that's when they like to swim. So don't think you HAVE to go back to your hotel mid-day; it's entirely up to you! Also, it doesn't ALWAYS rain every day. In July '03, we were there from July 5-12, and it only rained ONCE the entire time, for about 20 minutes. That was it. In July '04, we were there from July 10-17, and it only rained once again, but this time for about 2 hours. So rain was not an issue for us.
But you'll have a great time, don't hesitate to go in July!