IMO, while Christmas may be busier, the atmosphere is so much better. And the hours are longer to compensate.
In our case, we went to WDW twice when our son was young (at 5 and then at 9). The first time we went right after the new year because it was cheaper, then the second time we went just before Christmas (leaving WDW on Dec 24). We enjoyed the second trip so much more as the park was much livelier with all the Christmas decorations and special activities (and possibly less crowd as it borders the true high season).