Well, first let me give you my very biased opinions.
DLH is wonderful and I don't mean to sound biased against it because up until recently, it was our hotel of choice. I just don't like the construction going on right now and since I don't know when your trip is scheduled, I wanted to make sure to mention that it was, a few weeks ago, still undergoing major renovations. This included most of the lobby being shut off.
It does have larger rooms and they are nicely redecorated, but with 2 adults and a 14-year-old, the "magical" headboard and room for a daybed probably isn't as important to you as the nicer location and more luxurious feel of GCH would be. With DLH, I did not want to pay extra for a premium view room only to be looking at a construction site.
I *personally* don't get the big deal of watching fireworks from your room. A lot of people enjoy it and I've done it before...a few years ago, my sister and I had an upper level resort view room in Frontier Tower (facing DTD) at DLH and as it was shortly before the remodel, there were still sliding doors that opened. We sat on our couch (which we pulled in front of the open sliders) and watched the fireworks with a glass of wine in hand. It was great, but not so much because of the fireworks! It was the holiday season, we were having fun, music was floating up from below and there was a giant Christmas tree directly below and in front of us. The view of the fireworks was ok but nothing like being in the park. If you really want to see the fireworks, I would say to just view them from inside DL! I never hold a spot but still manage to see them just fine when I want to. I'm usually more interested in other things, though, so take my advice with a grain of salt
Now, as to your questions.
1. It is easier for me to show you on a map where the woods view rooms are. I'm not an expert but I think this map helps a lot:
Any room in the "horseshoe" around the pool is good--elevators are close by. Those would be pool view rooms.
The right wing of the horseshoe (rooms 333-359) and I believe the far side of the 'L' shaped wing directly across from it would be woods view rooms on the 2nd and 3d floors. Above that (4th-6th floors), they become premium views!
The big rectangular space with a small opening on one side is the Brisa courtyard, and rooms around it would be courtyard view. The monorail runs through it. On the outside of that is DTD.
2. Is the location of the pool view worth the extra money? Well, it depends on a few things, like how much extra money they're charging you, how long you're staying, and how important a slightly better view is to you. In general, no, for me it isn't worth it. We paid for the top tier room Oct. 13 (requested theme park view, but it was same price as pool view) and it was only marginally (if any) better than the tier below it, which I believe was a woods view. I would request a woods view near the elevators. I think it may be in the same category as a courtyard view, which IMO is no big deal. Those used to be standard until recently. The monorail goes through but it's nothing much to see, though it is better than a parking lot view so there is something to that idea.
Anyway, the only thing that separates many of the woods view rooms from the premium rooms is floor location! The woods view are levels 1-3, so they are exactly the same location, just lower down. They may have some pool or theme park views but the views will be at least partially obstructed by trees. I *personally* plan to try for a woods view and try to get 3rd floor near the elevators.
3. Is there any chance of an upgrade at GCH? Well, I've heard of it, but it doesn't happen often (has never happened to me!). The general rule of thumb is that if you really want a particular view, then reserve it. Now that they have added extra tiers to the room categories, there may be more upgrading if the hotel isn't full, particularly from standard to whatever is above that now. But if you're going during a busy time, there is very little chance of an upgrade and they never upgrade to concierge or suites unless some major snafu has occurred and they're trying to keep the customer happy. Even then it's very unlikely at GCH!