$25K is reasonable, but remember that a 3 bedroom place in that price range is likely to be not much more than 1000 sq.ft. You get more for you money in Pokfulam, but depending on where your wife will be working, she may have more of a commute. The normal recommendation is to get a serviced apartment for the first 2-4 weeks here to have a good look round before you pick an area or an apartment. Remember that apartment leases are almost always with a minimum term of 12-14 months so mistakes made at a distance can be painful.
For the visas then you (and your son) will get Dependant Visas (which your wife can apply for at the same time as her Employment Visa, and you are then free to work. But bear in mind that you will be liable to HK Salary Tax on your income.
Your mother-in-law (assuming on a US passport) will get a 3 month visitor visa on arrival and she probably wont have much trouble going to Macau/Shenzhen an coming back to extend for one or two more 3 month spells. But at some point (undefined, at the discretion of the individual Immigration officer) Immigration would tell her to go away for a longer period.