Do not stay at the Fairmont. The rooms are very much in need of refurbishment, and are not worth the price. The waterpark at Arizona Grand is OK, but the hotel is meh and not really luxurious. If you want luxurious, consider the AZ Biltmore, which has had a recent refurbishment and now has a great family pool as well as other things, or The Phoenician- which has a fab kid's club to boot. The newer Canyon Suites portion has really great rooms and better service, though is further from the family pool.
Other choices are the Hyatt Gainey or the Westin Kierland, both of which have waterpark-style pools and are relatively decent hotels. I personally am not a big fan of the Four Seasons and think there are better options especially with kids. I am a Phoenix native, and have stayed at various times at all of these.