Like others, I think AI hotels may disappoint, both for amenities & other clientele attracted, and lack of authentic Cretan experience. Still, you want a place that works for your group: amenities, activities, close to beaches and sightseeing. I nominate CHANIA area: scenery, beaches, gorgeous Old Town, authentic sites, hikes food, etc. Just a few miles West of Chania (a 15-minute local bus ride) is a "hotel complex" (actually 2 buildings w apartments Golden Sand and Golden Sun). Includes cafes, pool, play areas, 200 yards from a great beach); This website sums it up - http://www.travel-to-crete.com/hotels/chrissiakti/goldensand/ Check reviews, mainly from families - https://www.tripadvisor.com/Hotel_Review-g1574395-d661746-Reviews-Golden_Sand_Hotel-Chrissi_Akti_Chania_Prefecture_Crete.html#REVIEWS (almost all v. favorable! The few complaints date from 2015 or earlier).
If this piques your interest, I suggest you email DIRECTLY to the local owner-manager at address given at first link. Don't just fill out a form; give specifics like family make-up (i.e. 2 Grandparents /1-br unit; 2 parents & children aged 5,7, 9 need 2 br unit) Est. dates (July 7-12); ask rate options. I find this works best w family-run operations (esp. if you are polite & praise the area and what you've heard of their operation); for Greeks, the hospitality business is personal.
From my experience, visiting CHANIA And vicinity at least 5 times, I think you'd find SO much to see, do and discover.. and without being surrounded by a package-tour "hive." While a rental villa sounds wonderful, it would also be costlier than this option and require renting 2 vehicles, with a lot of coordinating for different interests & needs. Good luck in your planning!