I used to lived in Morro Bay for a year on an internship so this thread is bringing back wonderful memories for me.
As much as I love Morro Bay, Obispo, Heart Castle, Madonna Inn etc.. for your kid's ages I do not think you should be heading all the way to LA.
I think you should focus on slightly south, Monterey and Big Sur and then maybe head out towards Yosemite.
Hearst Castle is wonderful for adults. For kids, maybe 5 minutes. Madonna Inn is funny but it isn't "totally cool" for kids. Morro Bay and SLO are not that awesome for kids either. I just think the SF area and Yosemite has so much more awe inspiring and nature, which seems to be what you are looking for.
I would combine LA and San Diego another trip.