The drive on PCH from Newport to Dana Point has beautiful spots &
lots of kid friendly stops.

Here's what I might do.

Fun Zone in Newport Beach - Balboa Peninsula.
Ruby's Diner on the Pier - Balboa Peninsula burgers, salads, soup.
Then take the car ferry from Balboa Peninsula to Balboa Island.
Drive down PCH to Laguna Beach. Touristy in summer, but in the
winter, very relaxed, mostly locals if you feel like stopping for another
beach Laguna Beach - Main Street Beach.
Dana Point - Ocean Institute
http://www.ocean-institute.org
(Kids love this).

There are whale-watching boats from both Dana Point & Newport Beach.
Bring your binoculars.