if you have money left after the other show, book that. By the time you pay for the show and photos, and the special gift for your dad and his wife, you will have had a trip to remember!
I'd add a breakfast or lunch at Crystal Palace with Winnie the Pooh and would take DD to World of Disney at Downtown Disney for some shopping, where I would make sure to pick up a nice shirt for Grampa!
I would book a Cinderella dinner at the GF the fairy godmother is the best!!! She makes every little one feel like they are Number one!! I have 3 kids and each of them still talk about her!!
Don't forget to tell Dad how awesome he is!!! and send him a picture in a nice frame as a memory of your trip!
ENJOY!!!!! remember it is very addicting to go to Disney (welcome to the insanity )
If I was still able to, I'd upgrade the hotel. If not, I'd probably just book a couple nicer dinners and also plan some extras, like watermice rentals, etc. Try not to spend it all. And of course, something nice for Dad!