Most of the places you want to visit will save you money by driving, but you'll pay for it on the back end with your time, longer walking distances and the inevitable ZTL traffic ticket. I highly suggest trains for these cities unless you know what you're doing.

I'd probably suggest skipping Milan, or just keeping it to a stopover before getting on the next train. Florence for 3 nights, Rome for 4-5, Venice for 3, as much time as you want at Como before going back home. Skip Pisa if it's a first time trip - it's a nice place to visit, but I wouldn't go out of my way for it.

Depending on the mobility of your MIL and toddler, you might adjust or remove Rome entirely. There is no way around doing a LOT of walking in that city. It's beautiful, but very little is clustered together. I'd suggest adding some additional time to Florence and Venice if mobility is an issue, since it's a smaller historic center and can all be walked. In this same line of thought, you should take the train to Venice. You can't take a car there, but the train goes all the way to Santa Lucia, the main train station on the island. You can walk from there, provided that a few steps aren't an issue (to cross bridges).

We spent a week last year in Florence with my daughter who was 18 months at the time. We're going back there for another week this fall now that she's 3. That's a good, compact city if mobility is an issue. The downside is that it will be swarmed with tourists in June and July - I personally don't visit Italian cities between June and September, but that's my preference and I don't really enjoy crowds. On the other hand, my honeymoon was in July, and covered Rome, Florence and Venice, and we still had a nice time, so it's not impossible, just hotter and more crowded.

June/July are absolutely high season. Reserve hotels in advance.