Why don't you head out to Breezy Point? It was beach-y enough for my almost-4-YO and we found a bunch of shark teeth to boot.

Traffic on 95 is going to be terrible no matter what. We left at 1:30 last Friday and STILL sat in standstill traffic to Fredericksburg. It just is and always will be hell on that stretch no matter what time you go.

Delaware schools go back earlier than MCPS. We always go the week before school starts (this year August 20th). Many places reduce prices that week as well. Holiday Inn Express in Bethany has rooms then. Check booking.com which shows you everything available for your dates in Bethany, Fenwick and Rehoboth.

you can do a mini-week rental through cbvacations.com

Typically they are Fri to Mon, or Mon to Fri. Sometimes you can do Thurs to Sun or Sun to Thurs, but those are less common.

I believe the trick is to plan your visit before the end of July. There's only about 6 more weeks of summer, so yeah, things are booked up...

I'd look at condo rental in OC, MD. There is a lot more inventory there.