Night between Whitby and London

My favorite: http://www.grassington.uk.com

I would suggest that you take a train from London (Kings Cross) to York. Stay a night or 2 in York and then hire your car and head for Whitby.
www.nationalrail.co.uk (Pre-book the train about 11 weeks ahead for cheapest fares. Turn up and go fares are much more expensive).
www.visityork.org

I would second York. We have just spent 1 night there and enjoyed ourselves immensely. We did not have a car but arrived from Edinburgh by train at noon the first day then left for London late the following day. This gave us plenty of time to walk the City Walls, meander through the town and see the Minster. The second day we visited the Treasurer's House (a National Trust building) and the Railway Museum. Happy Travels 😃

I note you're looking for a little village, not a city like York. Personally I can't speak for any, but you might look through sources like this one
http://www.telegraph.co.uk/travel/destinations/europe/united-kingdom/galleries/The-best-English-villages/

A car is a disadvantage in York and that leaves you with a long drive from there to Londin (better, drop the car at York and take the train).

Somewhere approximately mid point would be the pretty villages around Rutland Water, just off the A1 or the nearby characterful towns of Stamford, Uppingham or Oakham. These are like a small version of the Cotswolds, but without all the crowds. Or drive down the M1 and visit Bletchley Park, but you may not have time for this.

Thanks so much everyone, I'll look into all suggestions.