We are going to Malaysia at about the same time - with DS(3yrs) and DS(5mths). We are having one week on the beach - up in the NorthEast, off the coast of Khota Baru - look up the Perhentian Islands.
They are idyllic. May or may not be your thing. The smaller island (Kecil) is more for travellers, the bigger (Besar) seems to cater a little more for families. Both have a selection of places to stay from very basic huts, to European/Western standard hotels.
I went to Kecil as a student, doing the travelling thing, and we're now going back as a family. No doubt there will be a bit more going on than then, but by all accounts it is still very quiet, no roads, gorgeous beaches, snorkelling possibilities, diving (if you're into that), but mostly just relaxing and letting the little ones enjoy the sand and crystal clear waters (stay shallow for a long time in many bits)- and the peace and quiet. There is not masses to do.
You can fly into Khota Baru, then get 45min taxi to the jetty Kuala Besut, and a fast boat that takes another 40mins (also fishing boats you can take, but take twice as long)... Sounds ominous, but would not be too bad a journey, and I think, definitely worth it :0)
Look at the website for Anjung Holidays - bit cheap and cheerful, but gives a good summary of the accomodation. Also Wikipedia has a good write up on the Perhentian Islands.
Anyway, just a thought. I am VERY much looking forward to it.
(There is also Pulau Tioman, which is a bigger island, SouthEast, probably has more to do, but is not nearly as beautiful. Still clear waters etc.... but I rate Perhentians MUCH higher - Tioman does have its own domestic mini airport too, so maybe easier to get to)