You should have plenty of space. The 1BR villa at BLT has 2 full bathrooms (1 in the MBR and 1 in the foyer) plus a bedroom, kitchen and living room. The bedroom has a king size bed. The living room has a pull out couch that can sleep 2 plus there is a sleeper chair in the living room. Each room has a pack n play portable crib so if your 2 year old is still in a crib you could set that up either in the MBR or with the other kids in the living room.
Here's a link to the point charts:
http://www.wdwinfo.com/disney-vacation-club/BLT-Points.htm
If you figure out which room view you want and the dates you can determine how many points you need. The reputable rental sites rent the points from between $13 and $16 a point. Here's one of the more popular sites, but there are others too if you do a google search for renting DVC points.
http://www.dvcrequest.com
You will usually save some money over paying the cash rate to Disney for the rooms unless they are running a good special.
Even if you rent a DVC room from an owner you can still get DDP if you want it. With the full kitchen you may not need it. If you have a car you can stop at a local grocery store and stock up. If not you can get them delivered right to your room. When we go we usually order groceries from garden grocer:
https://www.gardengrocer.com. If you don't want to wait around the room for the delivery you can have them deliver your groceries direct to the hotel and Bell services will hold the order for you until you call down to have it brought up to your room. They even have a walk in fridge to store perishables for you.
BLT is a great place to stay. Lots of dining options via monorail or boat to WL/Fort Wilderness. You can walk to and from MK too which is a nice time saver if you stay for Wishes. The MK view rooms have a direct view of the castle and depending on how high up you are a lot of the park. The Lake View rooms are pretty nice too. The lake is very peaceful and the balcony is a great place to have a morning cup of coffee or an adult beverage at night (garden grocer also delivers beer and wine
). The MK view rooms are more points. Even if you decide on the lake view you still have access to Top of the World lounge (lounge and outdoor fireworks viewing area on the top floor) if you rent from an owner. It's a good place to watch wishes (they even play the music from Main Street).