First of all, you're going to have a wonderful time no matter what!!!! I can't comment on the dining plan, as we always stay off site and bring in our own food. I read that people spend a lot of time making ADRs and planning their trips around them. Personally, it's not something I'd do, as I would very much prefer to have flexibility to go where we want and when we want. Even if I had a dining plan, I'd rather do mostly quick service, because that would allow us to eat where and when we're ready. But that's just my own style, do what suits you.
As for park hopping, absolutely! Yes, you can do without it, but we wouldn't want to. We hop fairly often. Getting around between parks is pretty easy. We always take our car, it's faster and easier...and you get a nice quiet relaxing trip between parks. Have no interest in using Disney buses. The only WDW transportation we use is getting from the TTC to MK, or we'll also use the monorail from MK to Epcot, because it's fun.
One piece of unsolicited advice, and this can also be a controversial topic, but I'll throw it out there...get a stroller. Even if you feel your 5 year old is a great walker, etc...for your first trip, I think you'll be sorry if you don't have one. WDW is big...massive...you-don't-really-understand-until-you-are-there massive. Since it's your first trip, you'll probably want to see and do as much as you can. I don't ever recommend trying to do park open to park close, even with a stroller. But even a full 6 or 8 hour day in the park is a ton of walking. It would be really sad if DD5 ran out of gas on day 2. Trust me, we're fitness nuts, and WDW can wear even us down. It's HUGE.