Hard questions to answer - a lot of opinion involved.
1. For the 2 main parks, we think 3 days is the right length for our family. One full day for each park then one more to do favorites. After being there a bunch of times, we could drop down to 2 days if we had to for some reason. I think the most we'd want to do is 4 days for the 2 main parks. We've only done Volcano Bay once, but felt it was worth spending a day.
2. As others have said, tell us more about your kids. What rides to they like at other parks? To some kids, I imagine ET could be scary, but that same kid might love dinosaurs and not think JP River Adventure is scary.
3. Express Pass could not be easier to use. If you have Express, go in the park and pick a direction - it really doesn't matter. Start walking. Pass a ride, decide if you want to ride it or not. If so, get in the Express line. If not, keep walking to the next ride.
To use the pass, you just have to show it at the ride entrance, then again part way through the Express queue. Many people, us included, like having lanyards to make that process easy.
The biggest 'negatives' to Express are 1. the price; it ain't cheap. 2. get it once and you'll be spoiled for Universal and any other park you go to from that point on.
4. We prefer the Premiere hotels for the Express Passes. Royal Pacific is our favorite (my 'favorite' is whichever of the Premieres has the best rate the days we're going.) If they were all the same price, we'd choose Royal Pacific first, Portofino next, Hard Rock last.
We also like the non-premiere hotels. We really liked Aventura for the size - it's relatively small and the hub-and-spoke design means you never have a long walk between your room and the busses.
We've stayed at Cabana Bay and both Endless Summer hotels a few times each. They are larger resorts and can be a bit 'sprawling', potentially making for long walks to get back to your room.