I'd also say to probably not do the hotel thing, if your flight is late, you all fall asleep in the room, etc. etc. it could be tight and more stressful in the end.
I'd also probably try to avoid having the baby sleep during the layover (of coruse this is highly unlikely) but if they are more apt to sleep on the plane a lot better.
Do you have priotirty pass or anything where you can take turns freshening up in pay lounge?