I think you might be very interested in Simple Stories (http://simplestories.typepad.com/) products and/or Project Life (http://www.beckyhiggins.com/products/).
Definitely use D-Ring albums.
As for organizing, you may want to look into Library of Memories (Stacy Julian's organizational system). Pretty much the way it's designed is that you have 4 album categories:
All About Us -- includes you and your immediate family (husband and kids)
People We Love -- everybody else
Places We Go -- covers home and travel
Things We Do -- covers holidays, traditions, everyday life, collections, hobbies, etc.
It sounds like you would mostly be doing an ALL ABOUT US album set.
In Stacy's case, in her "All About Us" (family) album, there are 11 subsections. First, 7 subsections for layouts featuring each individual person in her family (herself, husband, each of her 5 children), and then 4 more subsections -- a subsection called "Together Forever" for layouts featuring the whole family together, a subsection called "Oh Brother" for layouts just about her 4 sons, and a subsection called "Just the Girls" for layouts just about her and her daughter. So when one of those "All About Us" albums gets full, she takes the thickest subsection (meaning she scrapbooks that topic the most) and moves into another, identical album (so she has numerous volumes). Thus she will have "All About Us", Vol 3 - and it will contain all layouts about one of her children, or all layouts about "brothers", or whatever.