Waterford Castle is probably a bit far.
We did this for Christmas 2011 and went to Druids Glen. Our numbers were very similar to yours. Not sure if they have self catering though as we all stayed in the hotel. No problem with interconnecting rooms for family. We also had a posh dinner and they catered for us very well and gave us a separate area with the kids at a table beside the adults. Food was good too. We also got a separate area in the lounge afterwards where we could all relax. The kids were made feel very welcome. Regarding activities on site they have a pool, gym, spa, games room, bike, playground, golf.
i have seen this hotel on pigsback.com too.
hope this helps.