We have eaten at both CP (Crystal Palace) and CM (Chef Mickey's)and we love them both. My suggestion would be to do CP for lunch. We find it to be a nice break during the hottest part of the day to have a refreshing meal and to rest our tired dogs while visiting the MK. The characters are alot of fun also but keep in mind this is a BIG place and your little ones may see Pooh or Piglet from afar and it may be quite some time before they make it to your table. This drove our 2 yr old DGD NUTS!!!
We have done both lunch and dinner @ CM and we prefer a late dinner then we take the elevator up to the deck off the CG (California Grill)(I think it's the 14th floor) and watch the fireworks over the MK from there. Some people don't realize you can go to the deck near the CG @ the Contemporary Resort, even if you aren't dining there, to see the fireworks.
Have a great trip!!! Hope this info helps.