I just took my family there in August. I have three daughters ages 7, 5, 2. We stayed at the Grand Californian, It made getting into California Adventure a piece of cake because it has it's own private entrance....I know most people can get in through it, but you can't beat the walk. Down an elevator and a short walk later you are there. I haven't stayed at the Disney Hotel, but it would be my second choice. It's about the same distance to the monorail as it is from the Grand Californian.
As for the rides, you really need to utilize fastpasses and baby swaps. If your wife and older kids want to go on a ride, you can wait with your 20 month old. Before they go on the ride go to the cast member at the entrance of the ride and ask for a baby swap, they will need to see the baby so they know you aren't cheating the system
. They will give you a piece of paper that will entitle you and one other person to go in the fastpass line to get on the ride, it will save alot of time. My wife would usually take one of our daughters and I would take the other one with me. While they were in line, I would have all of our passes and would head out and get fastpasses for rides we all could go on like buzz lightyear astroblasters, autopia, and a few others.
We booked through the
disneyland website and was able to get access to mickeys toon town early. I know other packages include this, but I am not sure which ones. You can get a somewhat private experience with mickey, minnie, goofy, chip and dale and a few others. It is closed to the general plubic for an hour while you are there, but there are alot of people who also use the same privelege to get in. It still helped us meet the characters quicker than we could have otherwise and we didn't have to wait too long to get onto roger rabbit.
Make sure you get autograph books for your kids. I swear we had more fun getting autographs than riding rides. My girls filled up two books each. To make it so your two year old isn't too scared of the characters, try finding some of the characters who aren't in costumes like mickey and minnie. Instead look for peter pan, wendy, mary poppins, any of the princesses. It will help ease your young one into he costumes without being as afraid.
Most of all, remember your two oldest kids will remember this trip by far more than your 2 year old. Let them go on some of the fun rides that your youngest can't go on. Don't cater the whole trip around rides that everyone can go on. Mix it up. This site has a section on it where you can get height restrictions for each ride. Go on a bunch as a family then hit one like indiana jones where you will have to baby swap.
I could go on forever but I will let others chime in here. I will check back and offer other advice as needed.
Good luck and have fun!
Personally, I wouldn't consider it as a hotel in the park...I think that is misleading, but Disney thought otherwise.
