Yes, it will be crowded. But that's because you're going to the most beautiful place on earth. As long as you know the public 'gathering places' (lodges, stores, cafes and other food, etc.) will have many people around, it's no big deal. Everyone is on vacation, in generally good spirits, and besides, it's fun to just 'people-watch' sometimes. You'll ride the shuttle around the valley to see the most popular sights, and if you want to play 'tourist'... well there's plenty of places to buy souvenirs, eat food, or take pictures.
If you choose not to camp and you're coming with minimal sleeping gear, the Curry tent-cabins are probably the easiest to reserve. With taxes they're about a hundred bucks a night in summer 2010, and there's no way anyone would get that much money for such sparse accommodations if this wasn't Yosemite. You don't pick your actual canvas cabin until you get there, and it doesn't make much difference, because even though your four walls of canvas give you a sense of visual privacy within, the fact is you are audibly within a few feet of someone else in a nearby tent cabin, and this gives you a sense of dormitory living... (you just don't
see the guy in the next bunk). You soon realize that the tent cabins are designed for sleeping and clothing storage... they aren't a place to spend much daylight time... the sights and sensations of Yosemite are elsewhere.
As far as the hiking, well, you have almost unlimited options. For your first visit, here's my suggestion: If you're camped in the valley, be sure to catch the morning bus up to Glacier Point. The drivers are fun, entertaining, knowledgeable, and will point out things you would otherwise never notice. Leave the driver a tip when they drop you off at Glacier Point. They work hard to earn it!
Then comes the reward... the Panorama Trail down from Glacier Point. Illouette, Nevada and Vernal Falls close-up, with ever changing vistas of Yosemite Valley, Little Yosemite Valley, Tenaya Canyon and Half Dome. And, you made it quite a bit easier (assuming you have good knees) by starting the 10-miile journey at the highest point.
If you're feeling more ambitious, then either the 7-mile round trip to the top of Yosemite Falls,, or the 17-mile round trip to the top of Half Dome, are obvious choices. Any of these suggested hikes will not soon be forgotten.
Have a great Yosemite experience!