My family of 4 is meeting at Disney World. My oldest daughter is flying in from another city, but because of the way the Disney World reservation were made, all 4 luggage tags arrived at our home. Can we use the 4th luggage tag (that my oldest daughter won't be using) for another piece of luggage? In other words, can the luggage tag with my oldest daughter's name be used even if she is not a passenger on the plane? I don't want to cause a security issue.
Your luggage tag means nothing to Southwest, they only care about the paper tag/sticker they put on when you check in your bag. That's the one that indicates where your bag is going and whose reservation it's associated with.
If your package includes some sort of baggage transfer by Disney upon arrival that could cause a problem, but you'll need to ask Disney about that.
Although not advertised, if you go to Magical Express and let them know you are there they may be able to pull your extra luggage even without the yellow tags.
The scenario you describe makes sense, Southwest will only care about what you check at the departure airport, and Disney will only care about luggage that shows up with yellow tags (or names that they are looking for).
You can "gate check" luggage on the Magical Express too if needed, the downside is that you would need to leave it with the concierge at the destination resort instead of having it appear in your room automagically. This works great if you need some items before heading to the parks even if you don't have a room assignment yet.
Home airport MDW, frequent visitor to MCO to see the mouse and LAS for work, A-list and CP.