My younger son also is really attached to his Xbox, but we never allow it to be part of our family vacations. When we are at Disney, we spend time as just our family of 4 - and the memories made are wonderful.
Sorry, I can't answer your question about hooking it up at Kidani Village. Our Xbox is part of our wireless network, and Kidani does have wireless, so it could work. We have not had the really slow internet speeds at Kidani that we have experienced at other DVC resorts.