I got a call from Disney today while I was at work and gave them a call back on my lunch. I spoke with the very nice cast member, Yolanda. I basically retold my story to her. She informed me that well, basically every single cast member that we spoke with was wrong in one way or another. A HUGE amount of bad training caused cast members to think that Friends and Family could receive a dining plan discount. Apparently that is never true. Only cast members can actually receive a discount on this. Good to know.
Yolanda extended the offer to allow us to pay full price for the dining plan. She began to plug numbers so I told her that I had already booked us a reservation with the Free Dining promotion offered to the public. She decided to compare the prices for us with using the cast member 40% off room discount and paying for the dining plan, to the Free Dining promotion. We were saving about $400 going with the Free Dining promotion over the room discount so we stuck with what we had. Yolanda cancelled our cast member discount reservation for us. She also downgraded our room back to a standard view at Caribbean Beach Resort so we could get the difference that we had to pay to upgrade in order to have Free Dining. This was much appreciated because the Pirate Room did not appeal to me for many reasons. Yolanda took my room location request (Jamaica) and she also told me that she put us down for an upgrade at no charge if one is available upon check in. Whether this means an upgrade to a preferred location or a... deluxe resort... I'd be satisfied. This was very nice of her to do this.
I'm pleased with the way the issue was handled. Yolanda explained everything to me as to why the misinformation was given and she also strived to make it up to us. She was very polite and treated me with respect. While the inconvenience we endured was stressful, I'm alright with how it turned out and so is everyone else in my traveling party.
Now we're just waiting for Mickey Mail! Yay!