Given the age of your children (3 and 5), you likely will spend most of your time at the Magic Kingdom. Furthermore, they likely will be wowed by the Monorail. (If you can get a reservation, be sure to book breakfast at Chef Mickey at the Contemporary.)
The Beach Club has a better swimming pool for young children (Stormalong Bay - suggest you search the Internet for photos) and is a convenient walk or boat ride to Epcot and DHS. However, I suspect you won't spend more than 1 day at each of these, possibly even less at DHS. The Boardwalk, across Crescent Lake from the Beach Club, is a lot of fun but I think it's more fun for adults and older children. Similarly, at the Beach Club you'll be close to Epcot's World Showcase which is the most grown-up land within the theme parks.
My instinct tells me you and your DH will enjoy the Beach Club more while the children will enjoy the Contemporary more. At that age, the kids won't know any better so it really comes down to how important is the convenience of being very close to the Magic Kingdom.