I'm here for seven days, and in a hotel room, 112 points it would cost me if I was a member but since I'm not I'm paying $3550 for the week.
So would I really need 350 points in the future? The room is nice and all, but we are doing our best to spend all waking moments outside and in the resort because it's so awesome with all of its activities.
You CAN save money by using a smaller room, but as the kids get older you are going to need more space, and I really don't think points are going to get cheaper.
Let's look at Marriott Ko Olina for a second. You can get a 2BR on the resale market for around $7-10k depending on the season. Maintenance will run you around $2000 a week. Much more affordable AND A BIGGER UNIT. The kids get their OWN room.
Of course, you have to like it. As a few have suggested, walk over there and see what it is like. Take a tour. Maybe it's not your style and it reinforces Disney as the place you want to stay. Compare it to what you see at Disney. Maybe the grass IS greener at the other resort.
The main thing to consider is your family's happiness. It sounds like you are having a great vacation with everybody thoroughly enjoying themselves. At this point you really are not missing anything as you haven't experienced a larger accommodation. Once you experience a 1BR or larger vacation there IS NO GOING BACK, LOL. And I am sure that almost 100% of TUGer's would agree with me on this.
I just wanted you to see the actual outlay for Disney for accommodations that you WILL NEED in future years. You can get Aulani resale for around $100-105/pt. Disney does have ROFR on any sale. I used Bay Lake as an example for the cheaper maintenance fees.
Lastly, some have mentioned how they rent out half their points to pay MF's for the year. It DOES work, BUT you have to double your upfront outlay. Meaning you have to buy 650 points which is going to cost around $70k out of pocket. You can get $13-14/pt renting, and with MF's at $7, you are covering all your maintenance. It's just the huge outlay upfront that gets you. This was a great idea back when you could get SSR and OKW for $50/pt. and it only cost you $15K out of pocket for 300 pts., of which you only needed 150 for a week's vacation.
Good luck with your choice and enjoy your vacation!