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December family trip - 5d/4n in Srinagar/Kashmir

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Dear All,
We (parents, husband and I) have planned a trip to Srinagar, India from December 28 2013 to January 1, 2013. We are from Manila, Philippines. I would appreciate advise on what to expect activity-wise during this time, as I have been hearing conflicting reports of what is viable due to the weather. Our itinerary is as follows:
28Dec (mid-day) arrive in Srinagar - drive to Gulmarg (stay 2 nights)
30Dec drive to Phalgam and spend the day there. Head back to Srinagar and spend 30Dec and 31Dec there. Fly to Delhi on 1Jan for the flight home.
We are booked at the Vintage Gulmarg - please advise if it is a conveniently situated hotel? Also, I'm in need of tour/hotel options for Srinagar and welcome input from everyone. I was looking at Hotel Dar Es Salam in Srinagar however I read that one should not choose a hotel near the Dal or Nageen Lake because of the smell and the hawkers. I do not know if this is true or not. Thanks in advance :)

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