My husband and I are staying at the end of Feb on a points redemption as well - we are super excited!
Back in September I emailed about potential paid upgrades from the Sunrise WV and was quoted $127 for the Sunset WV and $389 for the Grand WV with pool. These prices include all taxes. We ultimately chose to upgrade half our 8 night stay to the sunset water villa. I was told that the water is not only prettier but easier to swim in on the Sunrise side, so I figured we could try both!
Your upgrade to the Sunset WV seems pretty steep. It may be because they have low availability for that room type during your stay. Is your quote for the Grand WV with pool? If not, that seems pretty high as well.