Are you camping, wanting to stay in a hotel, or renting a condo?
First, with the planned kid activities, I would stay in the North county, Carlsbad, San elijo, Oceanside area. Not as busy as the areas in San Diego proper, and very convenient to Legoland. Just a more relaxed atmosphere in my opinion.
If you want to camp, depending on when you go, there are beach campgrounds that are pretty nice, and right next to the ocean. South Carlsbad State beach and San Elijo beach are both popular, and difficult to get reservations at, but cost about $35 a night to stay at. There are also commercial campgrounds in San Diego, but they are way more expensive, very crowded, and just as hard to get reservations for. To get campground reservations go to www.reserveamerica.com
For a hotel, there are a couple of really nice Hiltons in Carlsbad that we have used, even when we were camping, for a comfortable bed and a place for visitors to crash. This far out it is usually fairly easy to get Hilton reservations, and they run about $200 a night.
You can also get a condo a week at a time. They run about $2500 a week for a decent one. Different condos supply different amenities. There are real estate agents that specialize in Cobdo rentals. You will need to look them up.
Just a side note, Disneyland is about two hours away, and may be worth the visit. Universal studios is about three hours away. Both are fun if you are into that sort of thing. My family is, so we go quite often.