Hi there.
I have a four year old and nine month old and in Sept we're going to Hawaii. Yippee!!!
We normally do the same thing...get a "suite" so we have a separate place for my oldest, but with Hawaii it was a bit too pricey for us.
We like the Big Island and I found a great deal at the Prince Hapuna Beach Hotel. The rate was fantastic, kids eat free, it's right on the beach, parking is free. The rooms are a little older looking, but I figure at least it will be clean. You can also eat and have priveleges at everything at the newly redone Mauna Kea hotel nearby. I found the deal on Expedia, but also just did a bunch of online searching.
It was a toss up for us between this and the Hilton Waikoloa which is supposedly great for kids, but for us personally, I thought we might get tired of the "Disneyland" aspect of the place and opted for something a little quieter.
I know there's also a lot of condos in Hawaii too which some people love...for me...I work full time and have a part time business so I want a vacation where I don't see the inside of a kitchen once! Nor are having a washing/dryer a plus for me! Don't plan to do any laundry or even make my own bed!
But, I realize everyone is different. I say just get online and do so research there...good luck and Aloha!
-M