It's been a while since I've priced out the hotels at Disneyland, but that doesn't seem *too* bad of a deal. Your guesstimate on pricing for the whole trip probably isn't far off, either (depending on any swag you might pick up). If you're set on going in December, from my past experience there's a good chance you'll run into crowds; typically Nov - first week of January is pretty busy, but with a whole week at the park you'll have ample time to see and do everything in both parks.
If you or your son are fans of Disney, you'll have a great time. I might recommend checking out MiceChat (MiceChat - Disneyland Resort) or one of the other sites that tracks park updates and the like to keep in the loop of any events, planned ride closures, etc. Also, you have to get one of the churros in the park at least one day while you're there - for some reason they have the best churros in the world.
My wife and I are likely getting annual passports again for the parks - if you do end up going, shoot me a PM if you want some company one day while you're here (I live like 25 mins from Anaheim).