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Travel during Ferragosto?

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I am working on an itinerary for northern Italy in early August and I’m wondering what impact festivals – particularly Ferragosto – will have on our plans. Our dates are fixed, but we have not booked anything yet.

We are planning to be in Venice Aug 6-8, Florence Aug 9-10, and driving around Tuscany (including Siena where the Palio will be held) Aug 12-14. After that we are headed to the Cinque Terre.

I’d like to know if anyone has visited these areas during festival time, and if so, has it been a good or bad experience? My family is divided; some think it will add to the fun, but I worry about traffic jams, closed or crowded restaurants, higher prices etc.

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