I'm a big Universal fan, but I'm not sure it would be worth the money in your case.
First, you can't see even a fraction of Disney in 3 days, so if you have the option to add a 4th day there, that is what I would do for a first trip. We had 10 days at Disney our first trip almost 20 years ago when crowds and waits were nothing like they are now. We only repeated a couple of attractions. We also did open to close most days. That's how big Disney is. We could have stayed longer and not been bored. Also, most of these big parks are cheaper the longer you stay and extremely expensive if you only do one day instead.
If that's not an option, I'd look at Legoland. It's one that kids grow out of quickly as it is definitely geared more toward the younger crowd, so great to go now before they get too old.
You could also look at the beach or just doing some other activities around Orlando. Visiting the orange groves is always nice, and you can have pinics there, and there is a playground for children.
However, if you want to go to Universal for yourself, but you just want to make sure the kids will have something to do, that's a different story. There are attractions young children can enjoy.
I'm not sure if it might be better to get a 2-park ticket to give you more variety or not. It really depends on your preferences.
Here's a list of the tame attractions in each park.
IOA - Islands of Adventure
Seuss Landing:
Caro-Seuss-el - Carousel with Seuss creatures to ride on
The Cat in the Hat - slow moving indoor ride plus some spinning
One Fish, Two Fish, Red Fish, Blue Fish - Dumbo if someone was shooting water at you while you rode
The High in the Sky Seuss Trolley Train Ride - slow moving train, but on a track high in the air, might be scary if height is an issue
If I Ran the Zoo - interactive outdoor playground with splash sections
Oh! The Stories You'll Hear! - stage show with Seuss characters, highly recommend, this was a big hit with my girls, and they got an intimate meet-n-greet afterwards with the characters including the Grinch which was a highlight of our trip
Wizarding World of Harry Potter - Hogsmeade:
Flights of the Hippogriff - very short kiddy coaster
Wand Show - HP themed store where you go to see the wand maker, short show, one guest is chosen to participate
Interactive Spell Areas - If you buy an interactive wand, you can cast spells around the HP area
Frog Choir - short performance on a small stage of people singing
Triwizard Spirit Rally - short street stage show, music, dancing
Jurassic Park:
Camp Jurassic - kids outdoor playground / climb area
Jurassic Park Discovery Center - indoor educational exhibits on Dinosaurs, interactive hands on displays, very small
Pteranodon Flyers - sit down zip line type ride for younger kids, very high off ground, might be too scary if height is an issue
Toon Lagoon:
Me Ship, The Olive - play area where you can shoot people floating by with water cannons
Marvel Super Hero Island:
Storm Force Acceleration - Tea Cups (very mild X-men theming) spinning might be too intense
Meet-n-greets with Spiderman and other Marvel character, they will green screen in webs and different special effects for you in the pictures you take during the meet
Universal Studios - Florida
Production Central:
Despicable Me Minion Mayhem - Imax style movie with 3D/4D effects and moving seats, you can also sit in non-moving seats at the front if you like, very tame if in the non-moving seats
Villain-Con Minion Blast - an arcade style shooting game on giant screens, you stand on a moving walkway
Wizarding World of Harry Potter - Diagon Alley
Ollivanders - HP themed store where you go to see the wand maker, short show, one guest is chosen to participate
Interactive Spell Areas - If you buy an interactive wand, you can cast spells around the HP area
The Tales of Beedle the Bard - street stage show, part puppet show
Celestina Warbeck and the Banshees - street stage show, singers and danacers
World Expo:
Men in Black Alien Attack - slow moving ride, but in a dark area surrounded by aliens, some spinning as well, overall tame, but theme might be too much
Springfield, USA
Kang & Kodos’ Twirl ‘n’ Hurl - like Dumbo, just goes in circles
Woody Woodpecker's KidZone:
E.T. Adventure - slow indoor dark ride, scariest part is the dark forest at the beginning, but it does go up high in the air
Animal Actors on Location - cute outdoor animal show, with birds, dogs, cats, raccoons, otters, etc., they do a variety of different tricks, some audience participation parts for kids and adults as well
Dreamworks Land
Depending on when you are going and when it opens, this area will have a kiddy coaster and playgroud and some other attractions geared towards children. I haven't really been following the news about it, so I'm not sure exactly what all has been announced besides those two attractions.
Misc.
There are also a number of street performers and shows that pop up around Universal Studios all throughout the day, and there is a parade that is geared toward children. There are also a variety of meet-n-greets with different characters, The Minions, Scooby Doo, Hello Kitty, Spong Bob, etc.
Note: You'll also want to check the height requirements for rides. That might factor into how muchof the above the 5 year old can do.
As far as hotels, all the premier hotels are nice and offer free skip the line passes. There are three, Hard Rock, Portofino, and Royal Pacific. They each have walking paths to the park and also offer boat service. Even the farthest one away is still relatively close at an 18 minute walk from the lobby to the security gate. They each have their own pros and cons, and any of them would be a nice place to spend a few hours just hanging out.
Personally, I love Hard Rock for being the closest hotel to the parks, only about 5 minutes from hotel to park entrance. I also love the onsite restaurant there, The Kitchen. I've never had a bad meal there. The rooms however I find small, and it is usually the most expensive.
Portofino, I love the pool area and the beautiful big rooms. I try to book it for trips when I plan to hang by the pool and stay at the hotel more. It has these amazing memory foam loungers and little pool attendants. It's so relaxing, but it's very spread out, always feels like a ghost town, and is the farthest walk to the park at almost 20 minutes.
Royal Pacific I like ok. Nothing wrong with it, but nothing really stands out to me about it. Walk is about 10 minutes, rooms are slightly smaller than Hard Rock, theming is ok. It's usually the cheapest, so we stay there more than the other two. The nachos at the pool bar are to die for, though. Probably my favorite thing about the hotel.
Cabana Bay is the on-site value hotel. It's retro 50s themed and about a 20 minute walk down a nice path through the resort to the park. It doesn't have a boat but a bus instead. It features probably the nicest pool area for kids with a lazy river. There is also a bowling alley there as well as private entrance to the Universal water park, Volcano Bay. The hotel also offers family suites with a kitchenette area including mini fridge, microwave, and sink. It's a fun themed hotel for a great value. It gives me the closest Dinsey level theming vibe of any of the hotels. I've enjoyed all my stays here.
A stay at CB with water prak tickets, depending on the time of year, might be another option to consider. Volcano Bay connects directly to Cabana Bay. It's like having a water park for your hotel's swimming pool. It is so quick and easy to come and go between the two. 1 Day Volcano Bay tickets are cheaper than 1 Day Universal tickets, and you said you wanted to spend some time hanging out at the hotel, so this might be a good compromise. We've done CB /VB trips before, and it was a great time, just relaxing, enjoying the water and hotel.
Also, keep in mind that unlike at Disney, at Universal if you stay at any of the hotels located in the main resort, you have access to the amenities at all the hotels in the main resort. You are allowed to pool hop from hotel to hotel. You can even use the gym at another hotel if you like, and the hotels are all a close walk away from each other. The only exceptions are the two off property Universal value hotels. Those hotels do not have amenity privileges at the on-site hotels.
