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9 days Iceland with two young kids

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Hi Everyone

We have decided to take our two young one (4 years old and 1 year old) to Iceland this Sept. We intend to rent a car and drive around. Basically with the kids, we don't like to rush around too much. What are your recommendations for overnight stays- hostels with family rooms/ guesthouses or cheap hotels?

Besides the Golden Circle, where else is interesting and not too child unfriendly? Also, are most of the attractions (such as the waterfalls, glaciers, lava field, fault line etc fairly accessible by car or do they require serious hiking?

Thanks a heap.

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