Have you looked to see which will get you greater savings - airline or hotel? You may not be able to cover both in just a year ( though it is possible if you get your spouse in the game). But, lately there have been some great deals in Hawaii so you may be surprised. While you're planning Hawaii now, next year you may be kicking yourself because you "only" got $300 value for the points and your next trip your desired hotel or airfare is three times that, but the points are gone.

I would also suggest checking out VRBO and Home Away. I am a confirmed luxury hotel person, but in Hawaii prefer to rent a house. The prices are incredibly low (at least on the other islands) and locations are great. You have the advantage of cooking et al, and with two children it's an option to consider.