Hi Stuart
Your eldest needs to go to an International school at her age but, as you say, your little one will do well in a local school & will integrate better with the Spanish kids.
There's so much advice on here & all new members ask exactly the same questions so explore the forum. We'll help wherever we can but please look at other threads as most of us have worn our fingers out saying the same thing so often, ha ha !
Renting is a good option as you'll have a lot more time & will see many areas at leisure. We have two lovely estate agents posting on EOS from the areas you're planning to look in. If I was you I'd contact these two great guys. "Georgia" is in Guardamar near where we live & "Gillespie" is in Puerto de Mazarron, I believe. I had the great priviledge to meet both in June & they are smashing guys. Between them they'll advise you best. Tell them I gave you their details.
Email shaun@rightmoveespana.com (Georgia) of http://www.rightmoveespana.com/
Email ken@propertyshopsgroup.com (Gillespie) of http://www.propertyshopsgroup.com