When you are going and the ages of the children may play a factor in your decision too. If you will be there during a major holiday, the traffic will be worse and you'd need to choose carefully if you stay offsite... get very near the property and ask at check-in for the fastest route in to the parks. Often, there are back roads that will save you time. This is also true if the children are very young and you'd like to be able to return to your resort or home for a mid-day break. All this matters much less if you're going during a quieter time.
Depending on whether everyone would be happy and comfortable with that much togetherness, you may find that having 2 villas for 8 each would be more comfortable than one very large home. Personally, I would want to stay in villas or a home, over 4 hotel rooms, though. Trying to coordinate such a group will be hard enough. Having to do it betwen 4 separate hotel rooms scattered throughout a sprawling hotel resort, like the All Stars would be even worse.
In villas or a rental home, the adults could still socialize when the little ones are napping or sleeping. Swapping off nights of child sitting is easier (more familiar surroundings than hotel rooms). And gathering for an easy spaghetti meal or shared breakfast is simple & cheap. Carpooling would be easy, to accommodate differing interests or schedules.
Onsite villas are very nice but much more expensive than offsite. Only you can decide if it's worth it for the onsite perks. Often with so many families, not everyone can afford those Disney rooms. You'll have a ball offsite too, if you choose a really nice place to stay, very close by. Hope this helps.