On my first trip to Spain, about 4 years ago, I met several British expats and got a sense from them that there are lots of them, to the point where there are shops that sell lots of British imports and even a couple places where you can get a good afternoon tea with real clotted cream. They retired to Spain because it's a lot warmer than the UK and real estate is a lot cheaper and because there are lots of inexpensive flights to the UK so they can visit friends and family - espcially kids and grandkids often. They said that more Brits were retiring to Portugal since the real estate prices had risen in Spain.
There are a lot more Spaniards than retired expats in the area and it's up to you who you spend your time with. Malaga is a fairly large city with a pretty center. A visit in January, however, is not going to give you a true picture of what it will be like to live there for most of the year when tourists and locals flock to the beach. If you're looking for a coastal location, Costa de la Luz on the Atlantic may be a better option. Unless you are fluent in Spanish, living in an area that has lots of English media available is probably a benefit.
As for the Med, I live at the eastern end of it. Due to the prevailing currents, the crap ends up at our end. The only problems with the beaches are occasional rip tides and an infestation or two of jellies every year.