I reckon the S of France could be even busier than normal (if you're going August. But September it'll be fine again), as the French are more likely to be holidaying at home. In which case, as gorgeous as it is, avoid the Côte d'Azur, it'll be chock full of traffic all the time. Last time we went in August it was unpleasantly busy, and that was in normal times.
It completely depends on what you want. The Med beaches are nice enough, but there are also lovely Atlantic beaches, plus inland rivers, lakes etc. France really has something for everyone I'd say. I've had fabulous holidays in Avignon, Montpellier regions, and I know lots of families who've had wonderful times around Beziers/Perpignan. I love the are around La Rochelle, and Brittany and Normandy are really charming (although less reliable weather-wise. We tend to go south of the Loire for increased likeliness of good weather).
Avoid Paris and surrounding roads where possible, but in general, driving in France is pretty straightforward.
I always book Accor when in France, there's a vast range of prices across their brands, we find Novotel very good with children, also they have very fair pricing I think.