It will be crowded even on July 3.
We have been a few times and have always stood in the middle of Main Street near Casey's and Plaza Ice Cream. it gives great view of the fireworks behind castle, the imagery on the castle and the ability to turn around and look behind you for the 360 effect parts.
Be prepared to wait ahead of time holding your spot, this definitely isn't a walk up later and find a spot situation. Also, more than once, we have had to wait it out even longer for rain delays. They will happen, it is just a matter of how long past the original start time you have to wait.
It is crowded but we've always managed well including spending day doing many rides, and definitely worth having the unique experience.