WL and AKL are both beautiful at Christmas. I know you didn't mention AKL, but it is cool for kids with all the animal viewing, and they have tons of activities if you spend a resort day, like making animal feeders for the giraffes, African drumming, decorating cookies at Boma, etc. I would agree whatever you pick, do the value or mod 1st, and then deluxe. The theming at the values would probably be the most appealing to a 5 yr. old, especially All Star Movies, Pop, and AoA, but you will have better pools with slides at the mods/deluxe. We were happy with Pop, but love CSR and AKL.
Wherever you don't stay, you could visit an do a meal, like you can go to WL to do WCC, which is a fun meal with all the antics, and you will get to see it done up for Christmas. (You could also hop over to Ft. wilderness after, and do the campfire with Chip and Dale and see the movie). You could also do a meal at Boma to see AKL, or even hop a bus there after AK day, and see the lodge and animals. We also did Cape May at BC and saw the chocolate carousel, and did 1900 PF and tasted the giant gingerbread house! (Yes, I realize you can visit these w/o meals, just a way we tie them into our plans!). That is our favorite time of the yr. at WDW, so I'm sure wherever you stay will be awesome!