Ah, don't be envious! New York is like any major city: cripplingly expensive, all the stresses of housing and commuting and neighbors and services. It's freezing in the winter and boiling in the summer, and it's full of people who think they're the best thing since sliced bread! Honestly, visiting is the best way to experience NYC!
Don't hold me to 4 blocks x 4 blocks (which means 16 blocks total!), it could be a couple more here and there. Have a look online. There'll be information on which streets are the best to wander around. In fact, you could print off the relevant section of google earth and, with your DD and photos off the internet, plot your best route. That'll be fun in and of itself. It'll take an hour, hour and a half max. Basically half a day (second half, because you want to be there when it's dark).
You haven't asked but perhaps you'd like to know other things that would be fun to do with a small child: personally I think Central Park is really just a park, and it's been years since we had snow at christmas so it likely won't be fairytale magical, but there's ice skating there and 5th Ave is lovely with all the fancy stores decked out. Like Regent's St, but bigger.
The High Line is a nice and car-free walk. They have an amusing enormous pigeon which makes everyone smile. Lovely way to tour, and there are great restaurants and shops at Hudson Yards.
A good indoor experience would be one of the views: One World Trade, Hudson Yards platform, the one that's just outside Grand Central. They're pretty expensive but a great way to appreciate just how much water there is around Manhattan, and that it is indeed an island.
There are lots of random museums around town too: a slime one, optical illusion one, ice cream one, candy one, all sorts. Definitely worth a google.
And, of course, you should take the NY Ferry for a trip. It's the price of a subway ticket and is a commuter ferry. Lots of stops especially around the southern tip of Manhattan and into Brooklyn and Governor's Island. It's also sitting down and warm inside!