Really good advice posted above. If you go commando, you can get it done in 3 days, provided that you are not going during a busy holiday time. Since it's your first visit, I'd go ahead and do the 5 days if you can. You'll want to park hop no matter how many days you visit.
The onsite hotels are very expensive. I like Grand Californian, but I won't pay $600/night, which seems to be the going rate most of the times I want to stay there. If you can get a deal for it, it has an entrance to DCA and that is helpful when you get soaked on Grizzly Rapids (you can easily go change your clothes) and if you view World of Color, you can easily get back to your room vs. walking through the slow crowd that is leaving the park.
There are lots of less expensive places to stay and some on harbor blvd are close enough to walk to in 10 minutes or less. I think this thread will get more responses if it is moved to the
Disneyland board. There's lots of good info on hotels and things on this site.