Thanks for the recommendation. We ended up hiking to Grotto Falls because it was easier for my 4 year old.
Holiday Inn Express Downtown Gatlinburg was really great. They have a nice water park with 3 slides, a ton of kosher stuff at breakfast (oatmeal, bread, bagels, waffles, cereal, yogurt). The family room (6 people) was very spacious even with the couch pulled out and had two sinks, one inside the bathroom and one outside, a microwave and a decent size fridge.
Anyone interested in a TR? If not, I won't bother.