Crete and the area you are staying in is fine in September. Its NOT the month for rain !!! and the temp less hot and more bearable. You will have a wonderful time. The Cretans are such a lovely people, friendly and welcoming. Yes there will be less crowds and a visit to Knossos is well worth it. Best time is late afternoon as there are less crowds then.
Rethmynon at night is to be recommended with a fish meal on the harbour, after walking the picturesqe narrow streets. Also dont forget Chania and its wonderful venitian influenced architecture and harbour.
I can also recommend a visit to Kalives a typical crete seaside village lived in all year. it will give you a flavour of real Cretan life. Also there are wonderful safe sandy beaches there too. If you want more info about this area Im happy to tell you more.
john