The Surfsand is a great place to stay, especially with little ones. It is the only resort on the entire OR coast that has cabana service, so there will be large umbrellas with adirondack chairs set up, toys/kites to use, etc. It is close to Haystack Rock which has fantastic tidepooling at low tides. The hotel is also a short walk to the heart of downtown. You can rent a funcycle from right next to the hotel and ride on the beach. They have attachment trailers for your toddler. Ecola State Park is on the north edge of town and is another beach area that is great to explore.

As for 2 or 3 nights, it just depends on your preferences. One thing to think of though is that by the time you arrive, etc two nights is only one full day. So if you want more beach time, go for the 3 nights.

For your 4th night, you could do either Portland or Seattle. Both have a lot for kids.

BTW, Orcas Island is an island, but the San Juans is the chain of islands

I don't know how committed you are to Oregon Coast but it is a long drive from Cannon Beach to Vancouver, BC. So, I'll throw out two other suggestions to consider: 1) Vancouver Island and 2) Olympic Peninsula.

Scenario 1: We had a wonderful time with our toddler playing on the beach and exploring Tide Pools in Tofino.

Arrive Seattle (drive to Vancouver, get through customs, overnight in Vancouver; take morning ferry to VI, drive west across island to Tofino). (Alternatively you can overnight in Bellingham, just give yourself enough time to make border crossing and arrive early to ferry).
3 nights at Long Beach Lodge (we thought the lodge was really child friendly. We had a little cabin with a kitchen, but the main lodge was lovely too. I enjoyed drinking afternoon tea watching the waves from the main lodge while my little one happily did puzzles on the floor)
return to Vancouver and meet up with friends to explore Vancouver and go to Orcas (we usually stay at Rosario but there are several really cute B&Bs and Inns)

Scenario 2:
Arrive Seattle drive to Lake Quinault Lodge - 1 night, enjoy Lake and go on Rainforest tour
move hotels to Kalaloch lodge for beach time - 2 nights
final night in Port Townsend (walk main street, look at boats in Marina, get amazing ice cream)
ferry from Port Townsend to Coupeville, drive Whidbey Island (over Deception Pass) and continue north to Vancouver for very scenic travel day