At first I thought you were traveling alone. Needing accommodations for 3, I would opt for 2 rooms on PL, or make other reservations--maybe Hotwire or book direct. A condo would be a good option.

A rental car will open up the island, and give you many more options. How are you planning to get to/from the airport? Will your hotel have shuttle service? All things to consider.

Diamond Head--go early--no shade. And the steps at the top are unexpected and cruel . View is amazing, but make sure everyone is up for this.

The older hotels--Moana and Royal Hawaiian are worth a look while exploring Waikiki.

The North Shore is totally different, and a great place for a lunch stop--lots of options here.

There are many scenic drives, and places to explore. Manoa Falls is a hike to consider. Kailua is a fun beach town, good places to eat, and an awesome beach. Pali Highway has an amazing lookout stop, H3 is a scenic drive back.

Really, you could spend a lot more than 3 days on Oahu, and still not experience it all! Have a great trip!