Festival of Fantasy Package - 12/25 ?

It would be for the Christmastime parade. You will eat at Tonys Town square and then go to a roped off parade viewing area.
 
I definitely know that on Christmas day, they will have the Christmas parade. I believe that they switch over to the Christmas parade approx 1 week prior to Christmas, after all the MVMCPs are done for the season.
The question on how it works is the same as for any reserved seating/dining package. After you eat, a CM will give you ticket/coupon that you give to the CM "guarding" the reserved parade section. So, no different than getting a dining package for say Fantasmic.
 
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Yes. We did this last year on Christmas Eve and are doing it again this Christmas Eve. They give you a ticket during your meal and that gets you into the roped off area by the flagpole. We had a great spot with a head on view of the Christmas parade. Not a Tony's fan, but to me this is well worth it for the parade on a day that crowded. It was so relaxing.
 















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