You may want to consider Rajasthan also since you are going to Delhi and Agra. Not too far from Mumbai are the beaches of Goa if you are interested.

Also in Kerala, consider these hotels:-
Kovalam - KTDC Samudra
Munnar - KTDC Tea County
Alappuzha - Lake Palace Resort
Kottayam - Kumarakom Lake Resort or Vivanta by Taj

Thanks all. We don't plan to spend much time at beaches.

We prefer to stay in a hotel for more than one night if it works out. We will have a car and driver from Chennai. Can a day trip to the backwater area be done from Kochi- is 3 nights too long from there. How long for Munnar....we will be driving from the east?

It would be easiest to do a backwaters trip from Kottayam or Alappuzha (also called Alleppey)

Cochin (Kochi) to Munnar is probably 4 hours or so depending on time of day and traffic etc

Rome2rio shows Kottayam as a one hour drive from Kochi. We are trying to minimize one nighter trips. So far Delhi 2N Agra 1N Jaipur 2N fly toChennai 1N Pondicherry 2N Chettinad 2N Munnar 2N Cochin 2N Fly Mumbai 2N Fly to Toronto