where to stay for 4-5 day visist in hill towns?

One suggestion: Train to Chiusi and rent your car there. Renting in Florence is a pain (done it twice) and it's challenging driving out of town. The Chiusi auto rental folks are right by the train station (and in Florence, they are about 8 blocks away from the train station). From Chiusi it's an easy quick drive through the countryside to Montepulciano which would be a great place to base yourselves. There's enough to do in town to keep the kiddos occupied doing passegietta (sp?) in the evening, and some great places to eat, too. Consider the Politian apartments for a place to stay, in Montepulciano (politian dot com). I stayed there several years ago, and they are a wonderful younger couple who run the place, beautiful, well stocked apartments with comfortable beds, fabulous views, and very well priced for what you get. All of the apartments are in one building at the "top" of the town and several have two bedrooms. Hosts will email you very clear driving directions and will arrange for your parking. Friend and I were there for four nights and were always able to find a parking place within a block of the apartments (using the town parking permit that hosts gave us for our rental car). Sister and I will be staying there again this July, and hosts have again been very responsive and wonderful to work with making the arrangements. When it's time to move on to Sorrento, it will again be much easier to return the car to Chiusi and take the train from there than it would be to venture into Florence with the dreaded ZTLs on many streets into the center of town.

You could also drive directly from MXP, for a family it would be cheaper than trains. 13:00 hours landing means 15:00 out of the airport and ready to go. Driving from MXP to Tuscany is about 4 hours, therefore you could arrive by 19:00-20:00. The only problem I can foresee is the jet lag, which affects some people more than others, and driving on the freeway for four hours with jet lag means you could fall asleep at the wheel.

If you take the train to Florence, that is also at least 3 hours, once you add the train from MXP to Milan Centrale (53 min) to connect to the high speed Frecciarossa train to Florence (1h40m) and the related waits. This plan is less harsh on the driver. The problem here might be finding the rental office open if you are delayed. Rental offices in Florence are on Borgo Ognissanti, a street 10-15 min walk from the station (in itself a challenge with luggage) and offices close at 19:30. Also from Florence to your final destination it might be a challenging drive. It's rush time, so lots of traffic to get out of Florence, and your final destination, depending on where exactly, could be a challenging winding road drive.

So to make a long story short, maybe sleeping the first night in Florence and renting the car the next morning is not such a bad idea after all. You could also rent at MXP, sleep the first night in Stresa, near the airport, and drive the long trip the next day. But then you might fall in love with Lake Maggiore and never make it to Tuscany.

If you stay in Montepulciano as suggested above, renting in Chiusi is an option. However the previous poster is underestimating the possibility that you might not make it there before the rental office closes.

If you are arriving after an overnight flight then don't risk your family by putting them in a car for a very long drive to Tuscany. If you are arriving from say England and are not jet lagged then get the car at Malpensa and drive to destination. My favorite base in Tuscany is Montepulciano. You have the beautiful town in the evening for restaurant choice and just charm and during the day you can travel to other great spots in the Val d'Orcia, the prettiest part of Tuscany. We spent two weeks there three years ago. Get a hotel with parking within the walls. If you could manage a week from Sat to Sat you can rent an apartment which is great with family.

Finding rooms for 4 is VERY difficult; if the kids are old enough finding two rooms will be easier. But an apartment for a week as a base would be best.

If you are landing at 13:00 there is no reason you cannot make the drive in the same day.
It would be likely a 4 hour drive so a very long day indeed but doable.
I would in this situation rent a car at the Milan Airport location.
If you decide to reach your San Gimignano or Montepuliciano that same day, the car from Milan Airport is the obvious choice, you would not want to take a train just to get closer and then same day still rent a car you would make the day far longer this way.

If a 4 hour drive after an overnight flight does not sound like a good plan to you, then deciding where you want to take a train and stay the first night would be first course of action and from that town you should be able to rent the car the following day.

I think it would be best to spend your time at one place and make daytrips to other towns you want to visit with the car.
One night in each town you would not enjoy and lose too much time packing up, checking in, checking out, etc...

With 2 kids under 12 that sounds terrible to me.
No more than 2 different places for that amount of time if you insist on staying in more than 1.
You may enjoy staying inside one of the walled towns or at an argitristimo outside of one, which would give the kids room to run and maybe a pool as well. I think both options have their benefit and if you decide to stay in places for your stay a couple of nights in each type of stay may have some value to you.
In Italy you can usually arrange a one way rental car without any drop off fees so does not cost more to rent in Milan airport but return to Florence or other town where you could drop off the car before taking your train to Sorrento.

I would rent at Malpensa and then figure out where you want to drop the car when you go to Sorrento... maybe Florence airport?
There should not be a drop charge in the same country. I have rented from there before and you do not have to drive in the city... it is a fairly simple drive. Obviously, some people do not want to drive after a flight, but I am able to sleep on a flight, so I do it all the time... I just won't do an 8 hour drive. You could also find a town you want to visit that is closer to Malpensa and stay there the first night, then go on to another location for a few days. I would not move too much with kids... San G would be a good choice or I have a little place in San Donato that is a favorite. Tiny town, not much there but a church, vineyard and a beautiful view of the Tuscan countryside. I stayed at a little place called Antica Dimora. It was wonderful.

I also recommend one base only. An Agriturismo (farmhouse villa) with pool is best for a family with kids. Anywhere in the province of Siena is central to most of the famous towns. Just find a place that is not too far from the entrances to the freeway connecting Siena to Florence or Siena to Bettolle, for easy access to fast roads for your day trips. The exact area will depend on which towns you want to visit. Just do some research and then tell us which you'd like to see, then we can suggest a central location as a base. The most visited are (probably in this order)
Siena (small city more than town)
San Gimignano
Chianti Hills towns
Volterra
Pienza
Monteriggioni
Montepulciano
Cortona
Montalcino
You can read about many more famous towns in the section 'villages' of this website:
www.borghiditoscana.net

To go to Sorrento you should drive all the way from your Tuscan location. It's a 5 hour drive (mostly freeway) but I wouldn't suggest subjecting your family and kids to too many transfers and trains, including Circumvesuviana train, if you return your car in Florence or Chiusi. Just drive all the way. If you want you can return your car in Sorrento (all rental companies have offices there) or just keep it till your next destination (not sure where you are going next or flying home from)