Driving up from Anaheim, I think you can get to Santa Barbara. I remember a very nice hotel overlooking the ocean, but don't remember the name as I didn't stay there... I stayed at a very nice youth hostel in town.

Carmel is a very pretty town, as much as Monterey. I also liked Santa Cruz, and I am sure your kids will like it too!

San Francisco is definitely a must, but go also to Marin County and the Mount Tamalpais (there's a woderful view on the bay), and if you have time see the Napa Valley-

Ciao Flavio in Rome