Grad nights are a party held all night in MK for high school seniors from all over the country. You have to have a ticket from your school to attend. I think MK may get a little crowded that day. We have ressies at CP for lunch on 5/5 and then we are getting out of there. =O) We figured early morning would be okay....crowds are usually lighter in the early morning, and the grads who are planning on pulling the all nighter will probably sleep in that day!!!
Spectromagic is a great parade. My DD and DS, who were 23 months and 5 months last year were enthralled by it. It runs on Sunday nights and Monday nights at 9 at MK. That is something your kids might like even better than Wishes...but your current plan sounds pretty good to me.
I would NOT cancel your CRT breakfast. It is highly unlikely you will be able to get another. They added lunch and dinner there, but breakfast is still the favorite, and fills up very fast. We are playing it by ear with grad nights, if we are at MK and it gets too crazy, we will just hop to another park. And like I said, mornings are usually not bad.
Fantasmic is a really great show, and I also love Illuminations. Illuminations is LOUD. We found the kids were fine if we just covered their ears before it started.

Then they loved it.
Wishes is a really beautiful display. The plan you came up with sounds really good, especially if your kids would be done by 10 pm. Last year,our little guy snoozed in the stroller through Wishes.
MK, then hop to MGM on 5/5, then Epcot 5/8, then Wishes on Tuesday. Like I said, we love Spectro, but if it is easier to get to MK on Tuesday so you can see Wishes, go with that.