Miami area: Where to stay- What to do?

Check out the Indian Creek Hotel. It's not in "South Beach" but just north of there. I don't know about prices specifically, but friends have said it's super-nice. It's definitely a boutique hotel.

I'd also suggest the string of hotels that are on Collins Ave. from about 38th St to about 44th St. These may be more family-friendly, but offer large pool & deck areas, as well as private beach access. The rooms are larger (as they're not the older Art Deco buildings), and the prices are reasonable. You're also not in the thick of South Beach and the club-y vibe that can bring

BTW

Ocean Drive = Tourists.

You'll have a hard time avoiding those.

I think the best places to go while you're in town w/ a more local flair (& still close to the beach) are Design District & Brickell/Downtown.

Will you be traveling with kids?

Renting a car? Miami has bad public transportation, if you don't want to do touristy stuff, I recommend getting a car and driving around.