if you're not able to drive then you'll need to stay at the magic kingdom or a nearby hotel that has a shuttle to the park although magic kingdom is more convenient. To minimize cost you could always stay at the lower cost all-star resort area. There are no deals to "cut the queues". Disney calls it a Fastpass and its free. Many of the popular rides have a fastpass line. There's a machine at the entrance to the ride and you essentially get a "reserved time" for when you can get on the ride. The earlier in your schedule timeframe the better since you're getting close to schools starting to let out. You could probably see the bulk of the things at disney in 4 days (one park per day). The price of tickets is essentially minimal the more days you stay so the biggest cost will be hotel/food should you decide to stay 4 or 5 or 6 days.
First off there is no staying at the Magic Kingdom. The Magic Kingdom is one of the parks in Disney World. You will want to stay onsite at Disney World though. If cost is a factor look into staying at one of Disney's Value Resorts (All-Star Movies, Sports or Music or Pop Century). Pop Century was recently renovated and you can request a King Bed and ALL Disney resorts are non-smoking. These would be the cheapest resorts Disney has to offer, however, they have others in higher price ranges that offer more amenities and easier transportation to some of its parks via monorail or boat or walking.
You can use Disney's transportation to/from the parks and Downtown Disney.
Offsite hotels may save you some money, but the shuttle services they provide can be somewhat annoying and hit or miss on timing. Disney's shuttles run pretty much round the clock, based on park hours. You'll be able to take a break from the park and go back to your resort.
For some more in-depth information I suggest using the forum sight
www.disboards.com lots of information there from lots of Disney's frequent visitors.