Castle Inn is not as close to the entrance as they advertise! And we had a horrible stay there, room conditions horrible and dirty and customer service just bad bad bad.
If Hojo's is unavailable try
Best Western Park Place Inn, it's THE closest offsite hotel and you get a choice of basic continental breakfast or strawberry pancakes. They have basic rooms and mini suites. Rooms are very well kept and the service is very good, they have a small pool but a large hot tub.
Also decent and RIGHT across the street are
Tropicana, very basic but very clean and good service decent continental breakfast too.
Carousal Inn we had an "eh okay" stay there 6 years ago but I've heard it's gotten much much better.
Park Inn-I haven't stayed at this one yet(I will in July!!!) but it gets wonderful reviews. It'll will be the most expensive of the four.
All 4 places have mini fridges and microwaves, so you can bring snacks, juices water etc from home for the room.
Stay away from Del Sol, Castle Inn & Suites & Park Vue all of which have been deemed "roach motels" at one point or another. Also, the Desert Inn & Suites has reallllly gone downhill in the last couple of years.
With your kids's ages I would say don't waste time on Universal Studios. We love Knott's, but it's for nostaligic reasons. I'd say spend the time at DLR.
especially since May will be so busy.
As Blackunicorn suggested ride the fantasyland rides first thing in the mornins! FIRST THING
And take full advantage of baby swap and fastpass!! Oh and Aladdin's Oasis should be open again(not the Aladdin show in DCA)it's in between the TIki Room and Jungle Cruise and it just a little show geared for kids, most kids LOVE this little show. Make sure and don't miss Fantasmic! even though the wait for a seat will be looong, it's worth it! And for the Electrical Parade the more you cheer and yell the more of a chance the characters will come over to you!
If your 4 year old is fearless and likes roller coasters we did our kids by this list
Go Coaster
Big Thunder
Matterhorn
Splash
Space Mountain
Be aware that the IHOP and Denny's across the street are overpriced and for the prices you'd pay there you can eat in the parks. Mimi's across the street is really good though.
In the park we've found the best deals to be
Rancho Del Zocalo(frontierland)
Plaza Inn(main street)
Redd Rockets(tomorrowland)
Also, in the Grand Californian Hotel there is White Water Snacks(easy to go there through the DCA/GCH entrance/exit. They have really good tasty food with GREAT prices!!
If you have AAA get a list of places that accept AAA to get discounts. I know that Goofy's Kitchen, Blue Bayou, Rancho and some other restaurants offer a AAA discount.
have a wonderful trip!!