Hotel Gran Pacifico offers a gym, sauna, game room equipped with billards and board games, spa that can be enjoyed on site. Activities they can arrange for you and your family are hiking, hot springs, nightlife, bird watching, Cathedral, trips to the shopping area, fishing, sightseeing tours, trips to the lake, craft market and forest. Hotel Puerto Sur offers family friendly activities like ocean trips, sailing, cycling, trips to the port, nature reserve, shopping area, dolphin and whale watching, cattle ranch and wildlife observation.

I hope that this information helps, if you need anymore suggestions feel free to ask!

Happy Travels,
Danielle - Latin America For Less

Sisterbay: have you considered Termas de Chillán, Pucón and Frutillar/Puerto Varas as possible stopovers? They are all worthwhile stops.

Some very useful tips were provided in a thread on the same subject that you have raised, some years ago: http://www.fodors.com/community/south-america/santiago-to-puerto-montt.cfm .

EGC - Thanks - I'll check out the old thread. Yes, we've been to Puerto Varas. Termas de Chillan sounds promising...do you know if it might be similar to Termas de Peyehue (not sure if I'm spelling that right) on the road to Bariloche? We stayed there when the kids were babies. I was thinking that they'd like that sort of thing now.

We have not stopped at Pucon before, either. Anything specific ideas for what to do/where to stay? Seems to be a lot of options.

We stayed near Pucon in Villarica at a great bed and breakfast -- there is lots of hiking in the area and the owners are great at assisting with activities

http://www.hosteriadelacolina.com/

We did a plane ride over the Volcano and others hiked to the rim, but there are tamer sites to see as well!

Anyone have advice on whether or not to visit the falls at Salto del Laja? This was a highlight 40 years ago (for a family member who lived there) but I've heard it is smaller now. We were just at Niagara Falls last summer, so I'm worried it will be a let-down. Might be nice if there are other things to do around it, though. Kids are 9 and 11.

Sisterbay,

Yes, the falls at Salto del Laja was THE highlight of central Chile, 40-50 years ago Nowadays, for many it will be something of a let-down, but for others, nostalgia can make the world seen through rose-tinted lenses...

I have never been to Termas de Puyehue, but Termas de Chillán has become a very sought-after destination for families, with many attractions for kids, including some of the "Adventure" type.

Another nice place for families, but in a lesser and quieter scale, (and much closer to the Panamericana Highway) is Termas de Quinamávida, near Linares.

Both of these Termas have good informative webpages.

Good luck!

Driving down the coast looks intriguing, but I am not finding many lodging options. Is it true that there isn't much there? We like off the beaten path, but not being stranded. Punta de Lobos looks like possibly a good stop. Is this a good coast town -- or are there others that are better? Any good beaches south of Santiago (we'll be driving south from Cajon de Maipo, so don't want to backtrack up to Valparaiso)?

Driving along (or near) the coast in those very rural corners of Chile can be really great. Despite the natural beauty and the wild scenery of those regions, there isn't much there in terms of number and variety of coastal resorts to choose from, or variety of accommodation, for that matter.

Pichilemu (and its nearby beach Punta de Lobos) are pretty scenic and fun spots in which most of the tourism infrastructure tends to aim at surfers.

Further south you have: Llico, Iloca/Lipimávida (and nearby Lake Vichuquén), Constitución, Pelluhue/Curanipe and Cobquecura /Buchupureo. Arguably, these two last ones may be the most relaxing as well as attractive, scenically speaking, among the above lot, but all of them have for sure lots of charm and most boast very picturesque and little-explored hinterlands with pretty colonial-style towns. For many, the latter are the real hidden treasure of middle Chile although sadly they suffered significant damage as a result of the 2010 earthquake.

With some exceptions, the touristic infrastructure of those resorts and small towns is not terribly developed and is certainly not upmarket. However, economical and functional cabanas are found almost everywhere. It's rather unlikely that you encounter big crowds in those places during January, except for weekends, but it's better to know ahead of time.