It's about time to cash in my Marriott points and do a big family vacation. I have about 530,000 points as well as a around 200K in United miles. We're strongly considering going to Japan, but had a few wrinkles to work out still...

If I do a travel package, we get 7 nights + enough miles (77K) to get all four of us there (me, wife, 7 year old, 3 year old) via saver rewards in late July/early August. Based on availabiliy, looking at about 15 nights total.

So I'm thinking, the package gives me 7 nights, the usual redemption gives a 5th night free when redeeming four. So perhaps doing something like...

7 Nights in one hotel, 5 nights in another, and then 3 nights spread out in singles (overnight trips) or in a single hotel somewhere.

Just playing with numbers, we could do 7 nights in a 1-3 RC, 5 nights in a cat 5, and the 3 singles in Cat 4's and that just about zero's out. Obviously numbers can shift around a lot.

With all that said, I have a few questions:
1) If we're going to spend the majority of our trip in two hotels (7 nights and 5 nights), where would you recommend those two locations be?
2) I've heard hotel rooms in Japan can definitely be smaller than in the US. Do you think we'd need two rooms? Obviously this would drastically change our trip, but if need be... so be it. We often travel right now with all four of us in one room. Either a King, Cot/sofa and crib, or sometimes 2 Queens and a crib.
3) Any suggestions for those other three nights? Places that it might make sense to do an overnighter at?

Appreciate any advice you can provide. We've done a ton of smaller trips as a family (Memphis, Atlanta, San Diego, Florida, England), but this will be our first of more than ten days and first time in Asia.

TIA!