You're nieces sound like "ride enthusiasts" similar to my DS4. How awesome that you'll be CL at AKL in a 2 bedroom!! Aunt of the Year for sure! With just a few shows at HS that would interest them, I like your idea to prioritize the other parks. DH and I enjoyed WDW before the little one came along and we LOVE taking him now (though we do look forward to the day he's ready to try some more intense rides). Everyone will have different opinions, but yes, I do think the characters are long waits. And you're not "moving" very quickly, 30 minutes in Winnie the Pooh's line goes by so much faster. I think a few character meals interspersed throughout your trip is a great idea. I wouldn't splurge on every meal, especially because your sweet 10 year old niece is a Disney adult for buffet pricing! But a few character meals mean you eat rather than waiting in line. While I won't waste my 60 day FP+ on a character meet and greet, I will for sure use FP #4 or 5 or 6 if I see a character we want to meet pop up. This is just me. I don't like character lines. Feed me or give me FP. Ask the girls their top 2 (or 3) characters/princesses and make sure they meet them.
There are other ways to meet characters. Fort Wilderness has a campfire sing-a-long that DS keeps asking to go back to. They light big campfires, you can make smores, Chip and Dale come out and play corn hole with the kids, sing some songs and then the party animals stay for an outdoor movie, while we go back to rest up for the thrilling rides, like Dumbo. This might be nice on arrival day or if you have a down day.
Are you planning on attending
MNSSHP? If NOT, one of those days would actually make a good MK morning, low crowds. The dessert party sounds great! Must do: get that Frozen ride FP at Epcot. Enchanted Tales with Belle is great at MK. They will probably enjoy driving at Tomorrowland Speedway and shooting Zurg on the Buzz ride. Depending on their personalities, the treehouse, tiki room, country bear jamboree and tom sawyer island would be great. your older niece might enjoy the jokes on the Jungle Cruise.
5 parks days sounds like a lot though! An idea is to to drop the 2nd AK day and just spend the day at AKL. Do those resort activities! Culinary tours! Cookie decorating! Face Painting! Hop over to Disney Springs. Just an idea if you want one less day to buy a ticket for. We also love the Park Hopper Plus for the water park or mini golf. Again, just ideas. I also cannot imagine going with a Touring Plan anymore. So worth the $15 to have a plan...even if we change it up, just hitting refresh and knowing we can avoid the longest lines.
DS4 loved things we were really surprised about. Trying the different sodas in Epcot at Club Cool. He enjoyed Be Our Guest way more than we thought he would. Spaceship Earth in Epcot was a huge hit. We didn't do the Kidcot stops in Epcot last time, but we are planning that for our next trip. The girls may enjoy that.
I didn't mean to hijack your post with our plans. I think you have a great plan! Enjoy your family time!