If traveling outside of San Francisco is in the cards for you then yes, I highly recommend a trip down Hwy 1 along the coast. I would personally go south and make a pit stop in Santa Cruz for burritos and nachos (any taqueria will be amazing in that town) and then continue south until you get to Carmel.
Carmel has a lot of art galleries and shops. Your family will enjoy the variety and you will enjoy one gallery in particular (Photography Gallery West) that has Ansel Adams and Ed Weston prints galor.
And yes, avoid Hwy 101 if you are going south. That is the inland highwy and it's pretty boring. North of San Francisco Hwy 101 and Hwy 1 overlap at times, but not south.