I have done this trip with a 5 year old and 5 month old in the heat of summer and don't regret it one second... HOWEVER - here are the things (after many more trips) that I would suggest:
1. Would you make any changes to the itinerary? Considering I'm going with two young children I figure I'll need the relaxing days in between the days at the park. Yes - Get a park ticket for every day you are there. It is much more fun to do the park a little bit in the day and have the down time in the afternoon vs trying to push and get it all in in one day. It gives you a feeling of more downtime vs less, you can see all the parks twice for the most part and you don't feel like you won't be back.
2. Are there any days of the week you would recommend for specific parks? No. They are all busy and slow at random.
3. With the current capacity restrictions, do I still HAVE to be at the parks early to ride headliners like FOP and MMRR and still be able to do most of the rest of the parks? With two littles, get to the park at opening (30 mins before) and yes, jump on rides right away. You will already be awake - take advantage of it. I wouldn't go to the most popular rides because everyone does, I've been able to ride 5-6 rides in the first hour the park opened while everyone was in line for the biggies
4. Which park would you do twice? Ideally, knowing what I know about WDW and being a DL vet, Id probably appreciate a second day at AK the most. However, due to the higher attraction count at MK and more stuff to do for the kids, MK might make more sense. I would do MK, AK both twice. Epcot may surprise you, my little ones absolutely loved it and we spent hours at the aquarium when they were under 10.
5. We'll be going with my sister, brother in law and 2 year old nephew so we'll be doing a lot of child switching on the coasters etc. Is this any less convenient at WDW than it is at DL? No. You'll be fine.
6. What are some MUST EATS at the parks, hotels and Disney Springs? Anything from a snack to fine dining. Although the latter may be difficult to pull off. It doesn't have to all be about the food. For example a lunch at Sci Fi Dine in really appeals to me. Something unique or atmospheric is fun too on vacation. Lots of stuff is closed right now but our favorites (with kids but still good food) Ohana, Sci-Fi, Mama Melrose, The French pastry shop at Epcot, Yak/Yeti and Via Napoli (inside, not the walk up window) are the only "musts" the rest we rotate around. We do love California Grill also if it is in your budget. We avoid most everything on the boardwalk area.
7. Am I making a mistake not getting a park hoppers? I just don't see the value in them on this trip because of the lower crowds and just the inconvenience of it all with my young kids. I also feel like Im allowing myself enough time to where I don't need them. I do worry however about one of my must do attractions going down and missing my chance to ride (unless its at the park I do twice). With park hoppers you can try again another day. No. We didnt' switch over until the kids were both over 10, it is exhuasting and honestly we used them more to eat at other places...
8. Any strong opinions on Coronado Springs? Is it a bad location and does it make it difficult getting to the parks with youngsters? Am I better off staying at the POP Century that has easy Skyliner access for example AND saving money? Caribbean Beach resort also has pretty good rates for a Moderate, is that hotel any good? Do not stay at the value resorts if possible. I understand that is in some budget, but if there is any way to move to a moderate do so. I really like both Carribean Beach and Coronodo springs and have been happy also with the port orleans. We finally bought DVC and have stayed in most of the deluxe as well and my kids still have fond memories and tell stories (they are 15/19 now) of CS and CB. The walls are a bit thicker and you usually get a better night sleep. Less kids for some reason... I have not done the skyliner but the buses are actually pretty good and really easy with a baby and stroller, especially that time of year.
9. What are the best ways to get to the parks with a baby and a 5 year old? Babies don't need car seats in buses right? Im not planning on renting a car as it doesn't seem necessary since I'm staying at WDW the entire time except for maybe the one day at Universal. Don't go to universal. take a front packAND stroller for the baby. Don't try to only do a front pack (i see this all the time). You are on/off bus pretty fast, no car seat.
10. What is the best way to get from the airport to WDW? Magical Express - it is free and so awesome at getting you ready for disney. We miss this when we drive
11. Id like to hop on the monorail and Skyliner at some point, even if buses may be more convenient from my hotel. What would be the best days to try out those modes of transportation? Whats the best way, convenient and or fun/scenic way to get to the parks from Coronado Springs? Monorail can do a loop in front of magic kingdom. Skyliner you can just jump on at one of the parks and do the loop. I promise you the bus is likely your fastest and easiest way even if it is not the most fun
12. Would Disney Springs even feel like a down day? With the hassle that it takes to get there, would I be better off using it as a park day or just going to Disney Springs on days where I possibly finish with the parks early? Disney springs is basically a shopping mall california style (outdoors) - if you go at night there is some music, etc that is cool, we skip it unless we are going to eat (boathouse is good and raglan road is fun but may be too loud for baby). Unless you want shopping to be your all day thing....
13. Is a 1 day park hopper enough for Universal? Is another day there, worth sacrificing one of my down days? Off the top of my head, there are only about 5 Must Do's for me between both parks. Skip it. The kids are way too young and it will be more of a frustration for you.
14. Whats the best way to get to Universal from WDW? Don't
15. Am I crazy for considering this trip right now with a 5 year old AND 5 month old? No!! You will love it.