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A challenge: need help choosing NYC hotel

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We are headed to NYC for two nites May 21st and May22nd with our two children, who are young (2 and 4). Last time we stayed at On the Ave and had a nice experience, loved the feel of the upper west side.. so family friendly and close to the Museum of Natural History which was a big hit.

so here is the challenge:
1. we're taking the train into and out of the city via Penn Station (34th and 7th)
2. We are meeting friends for dinner saturday nite and for an activity on sunday morning. They are staying at the Ritz in Battery Park.

With such a short amt of time I hate to be spend too much time traveling back and forth on the subway although we really like the upper west side. We are thinking about Battali's restaurant Otto Pizzeria on 5th for dinner saturday nite. We are thinking of checking out the huge dinosaur exhibit at the Museum of natural history on Sunday morning.

What makes the most sense for an area to stay? We can spend about $250-300/nite. I'd LOVE to find a place with a fridge as it's so much easier with kids who drink a lot of milk.
I'm up for trying something new ( soho?) but would love some recommendations here first. Thanks very much for reading!

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