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Southern Portugal over Christmas

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We plan to go to Southern Portugal 12/24 through 12/27. We are a family of 6 (mixed ages). We are coming from Lisbon and then heading to Southern Spain. We would love suggestions on which is the best base: Faro, Lagos, or somewhere else. We also want to know if we should rent a minivan/suv to tour around or just take public transportation. We would like suggested highlights. Do the sights, stores, restaurants stay open on 12/24 and is anything open on 12/25? Any suggestions for boat trips along the shore this time of year? Any special things to do with kids (besides walk on the beach)? Thanks so much!

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