I think you'd be better off going to Malaga rather than Alicante. I've been to the Costa del Sol (Malaga) lots of times but have also been to the Costa Blanca (Alicante). From Alicante you can either go towards Torrevieja or the other way to Benidorm (at least half an hour transfer in a car, much longer in a tour operator's bus!). I have been with my husband as well as our two sons and their children, one nearly two and the other 8 months and they enjoyed it. We always stay in Fuengirola as it's flat, has a lovely long beach with easy access to the sea (some beaches have lots of pebbles to cross) and there are lots of shops and restaurants. We have stayed at Las Palmeras, Las Piramides and Gardenia Park. The first two have air conditioning, the last one definitely didn't.

There are three main places in Costa del Sol that aren't too far away from the airport, Torremolinos, Benalmadena and Fuengirola.
Torremolinos is the nearest to the airport but you have to be very careful about which hotel you choose. A lot of the hotels and most of the the shops are a long way from the beach, set on the surrounding hills. If you're in a hotel at the top you have to either walk down lots of steps to the beach or find one of the lifts. There are hotels down by the beach but, of course, if you want to see all the shops you have to climb the same steps! There is a very long beach and the end near Benalmadena has some nice grass with palm trees that give welcome shade. Benalmadena is very hilly as well, although I think there are more hotels near the beach than in Torremolinos. Beaches are good as well but not as long as Torremolinos. Fuengirola is the furthest and is all flat. Plenty of hotels along the promenade as well as further back from the beach. There's a zoo and aquapark in Fuengirola and Tivoli World and Paloma Park in Benalmadena. A train runs from Fuengirola with plenty of stops along the way and goes all the way to Malaga, with a stop at the airport. You COULD use the train to get from the airport to your hotel but you have to be very careful to choose one that's not too far away from the station as some are a long way back from the beach.

Anywhere in Spain in July will be VERY hot so I would definitely recommend that you book a hotel with air conditioning in the bedrooms. You can get hotels which say they have it but it turns out that it's only in the lounge and eating in a stifflingly hot restaurant or trying to sleep in a very hot bedroom is no joke. One bit of advice you MUST take is to read as many hotel and resort reviews as possible before you book anything, although you need to use your own judgement in the end as some people will rave about a place while others, who went there at the same time, will call it a dump! Hope this helps.

Thanks Spindles.

I totally agree that aircon is a must at that time of year. I think Malaga will be the best option as I've seen lots of apartments for rent around that area so I think we'll have more choice. At the moment I'm leaning towards SC as it means we'll have a bit more flexibility around mealtimes etc.
And of course you are right - what's great to one holidaymaker ain't to another! So yes, we'll have to do lots of research. Thank god for HT!!