We've stayed at all the resort levels and enjoyed every single one. You really can't go wrong with any of them. I understand the bit about the pool slide for the kids, maybe a moderate resort would be a good compromise. We liked both the Coronado and POFQ pools and look forward to giving the Caribbean resort a try one day.
Are you planning on two rooms if you stay at a resort, I don't know of any that hold 7 (the family suites at All Star Music/AoA may work if your youngest counts as an infant). We stayed in a family suite at All Star Music once and had a great stay there and was very economical in comparison to some other resort options.
Did your friend give you one day park hoppers? You could get 3 day tickets for the adults and use the free tickets to make the 4th day, and do the same for one child. Other kids get 4 day tickets purchased. You don't need to hop if you don't want to and could just buy the regular one park per day tickets.
We rented DVC points for our upcoming trip, but I don't find DVC to be the deal it once was either.