I would also recommend more time at MK because of your kid's ages. Especially if you are staying at BLT. You can always do the other parks the next time. Also, they would really love the Halloween party at MK if you wanted to pay the extra for the tickets.
The Smoky Mountains, Gatlinburg and Pigeon Forge, TN. Thats my second favorite place to be after WDW. It's so beautiful and laid back. I could live there easily. I would also be closer to WDW if I moved there!!!