Here's some pixie dust for a great trip.
To add a little to what was already posted by Judith:
Will we need an MD letter? (we have one if needed)
No, you don't need one, but you need to be able to explain what sorts of difficulties you will have in line. "He can't wait in line" doesn't give any guidance about what sorts of assistance you will need. Be specific about what sorts of things are problems (being too close to people, being around lots of people) and what behaviors might occur under those circumstances.
Do we get a GAC at the hotel or at each park?
As Judith said, you get it a t Guest Services in the park. The GAC you get is valid for all parks and is usually valid for your entire trip. It will usually be for the person with a disability plus up to 5 members of their party. If you have a larger party (like 7 or 8), they may give you a GAC for that many; it's up to the discretion of Guest Services. There are times when only one or two people plus the person with a disability can use the GAC - for example, some rides have a small alternate waiting area and may only allow 2-3 people because of space. The wheelchair/handicapped viewing areas fro parades may limit the number of people (if they have too many members in parties, there is not enough room for people with disabilities.
What does CM stand for? (I see that posted here lots)
Cast Member
Does the GAC really help avoid long lines?
It used to say right on the GAC that it was not meant to give immediate access to rides or avoid waits. I't still assume that. What it is meant to do is provide the assistance that someone with a disability needs to make their visit possible. That might mean a wait in a quieter place somewhere other than in line.
When we get the GAC, do we also need Fast Pass?
It all depends on what your GAC says. Not all of them are the same. They are stamped with instuctions that are appropriate to the disability. For some, you will definately need to use FastPass to avoid long waits in line, for others you won't.
If you are able to get FastPasses, I would say to still get and use those. When we got our first GAC, they described it as sort of like insurance that should be used sparingly. You use it when you need it, not necessarily every time you go out. If the standby line is 15 minutes or less (not too likely at the time you are going) or you are able to get and use fastpasses, you don't need to use your "insurance" because you can manage without it. I'm not saying just to stick it in your pocket and not use it. For some people "sparingly" would mean they never need to use it, but just knowing they have it helps them to manange. For other people, using it for almost every ride is necessary because of the needs of the person with a disability.
I also wanted to mention that someone with a wheelchair or
ecv will automatically be routed to the wheelchair accessible entrance. They do not need a GAC unless they have needs other than mobility needs that that the CM would not be aware of without a GAC (like need to avoid sun exposure waiting in lines, for example).
! I got a GAC that said I could use an alternate entrance & use wheelchair entrances (two different stamps). Previously the GACs I got said I could use the fastpass entrance. I used the new GAC first at Tower of Terror. The CM sent me through the fastpass lane without my saying anything other than, "thank you." I had no problems at the Great Movie Ride, Star Tours, Millionaire, Muppets, etc. I found the CMs at Star Tours to be very aware of my using an 
