With three adults, I'd choose the one-bedroom villa in a heartbeat. I wouldn't even think twice. Disney's Grand Floridian Resort and Spa isn't special enough to make me cram five people into a single hotel room.
As for which villa: If you're spending more than one day at Magic Kingdom (which is typical) and you're not giddy with excitement over seeing animals from your room, I'd recommend one of the villas connected to Disney's Wilderness Lodge. While not on the monorail, you're still close to Magic Kingdom via bus or boat. In my experience, most kids seem to dig the boats.
Full Disclosure: I used to work for the Walt Disney Travel Company in Orlando as a Trainer for the Reservations Sales Agents. Part of our training course for new agents was touring every resort. Personally, I've never been overly enthused with Disney's Grand Floridian Resort and Spa. I much prefer almost any other Deluxe Resort. Also, wild animals freak me out...so the thought of waking up and seeing a giraffe looking in my direction is not a positive.