I will start by saying I grew up in Newport Beach but that was a long time ago. I have returned more recently as a tourist to both Laguna and Newport, and in Laguna it was when my kids were the age of yours.
I would strongly recommend Newport over Laguna for your family. Laguna is a lovely small town, more upscale,,with a smaller beach that we found difficult for swimming because it is so steep. Newport has a long beach that stretches for miles, with varying surf but swimable most places except at the south end known as the Wedge. In the morning you can watch the surfers on their boards, and then later you can go out and bodysurf. The Balboa Peninsula is the place to stay, and there are lots of rental houses. Myou should not have much trouble finding one for a thre- night rental in September ( I will be there myself at that time and have looked at a number of them, so Ihave a sense of the availability). Balboa Island would also be fine; it is short ferry ride from the Peninsula beaches.
One thing that is fun to do is rent sea kayaks or paddle boards for a tour around Newport Bay. Or try the stand-up paddle boards. there's are things you cannot do at Laguna as there is no quiet bay. Lose by, as there is at Newport. You can also rent bicycles to ride the safe traffic free bike path along the beach. Ride out to the Wedge to see the huge waves if the conditions are right.