Hi nco50, and welcome to cruise-chat.com.
A lower berth is ship speak for a bed that is about the height of a bed you'd have back home. It is positioned along the wall on the side or at the headboard. An upper berth is a bed that folds out of the wall that, when opened, looks like the upper bunk of a bunk bed. A ladder is provided to climb up/down. During the day, the cabin steward closes the upper berth so that it is out of the way.
Inside staterooms come in a variety of sizes. We were on a Royal Caribbean ship a few years ago -- Splendour of the Seas, I believe, that had larger outside staterooms. In fact, our son had a sofabed to sleep on, rather than an upper berth. Carnival ships also tend to have large inside cabins. Some NCL ships have two categories of inside cabins -- standard, and large. No matter what you decide, it sounds like it will be a fun cruise for all of you.