This would make a really good poll question.
I'd choose CR....even though WL is one of my favorite resorts.
I imagine that with a 3yo and 5yo in tow you'll spend most of your time at MK. The CR will make it much easier to get to and from that park given the monorail and the walking path (although it'd probably be a good idea to bring along at least an umbrella stroller for the walking path).
Since it will be crowded and hot over the holiday weekend it makes it even more imperative to be closer to the park. That way you can just walk back if the lines get too long for the monorail.
I personally don't like the boat ride from WL to MK. I think it takes too long since you have to stop at Fort Wilderness (sometimes coming and going). I, too, have a 5yo and 3yo and waiting around for the boat (especially with the crowds and heat) and then hoping to get seats (especially if the little ones are tired) can be VERY trying on the nerves of all of those involved.
Plus, they'll think it's really cool that the monorail cuts right through their resort.
I'd save the WL (because it's a really fun place for kids...and adults) for a trip where you're not tending to them on your own.
P.S. Catch the boat that runs from the CR to the WL one afternoon if you have some time and let the kids get a look at the WL to see if they'd be interested in staying there in the future (or vise-versa if you choose the WL over the CR).