I'd like to take my family to France and live in the south, ideally ~30 min to a beach and a reasonable drive (~2 hrs) to skiing. I was considering Montpellier because it comes up in many searches as being Family friendly, but it's far from both Pyrennees and Alps. Any hidden gems I should consider?

Isn’t every town family friendly? What are you looking for specifically in a town that makes it especially family friendly?
Move further east, the Var or Côte d’Azur for beaches & proximity to skiing but access to swimming can be difficult along the coastline, crowded and expensive to park, lots of traffic around Mandelieu La Napoule, Théoule sur Mer etc. Fréjus/St Raphael are not bad seaside towns. Good beaches around Toulon.
or more west, towards Spanish border.

Are you set in "South of France"? If not necessarily, check out Costa Brava in Catalonia, https://en.costabrava.org/

If you are wanting to live you need to find an expat forum.
If you want links here are some.
https://www.google.com/search?q=Best...outh+of+France
I would like to know what you mean by best as it means different things to different folks.

If you are serious then you need to visit the area yourself and see the places you are thinking of. Check out what schools, healthcare shops etc are nearby and how good they are. Visiting as a tourist is very different to living somewhere.
Unless you have an EU passport it won't be easy, and even if you are it can still be a bureaucratic jungle.
You need somewhere where you can also earn a living I assume, so you need to look at what jobs are like, whether you have access to fast internet in the area - specifically where you want to live if you are planning in teleworking.
Do you want your children to attend a local school or an international school? Do you speak French?

Prades is 45 minutes to the beach and two hours to skiing in Andorra. Thsis s a sensationally beautiful area, and this town (not a city) is made form the same pink stone as Toulouse.

If you have children in school, that is the main issue on which to concentrate, not how fast you can get to a beach or the mountains.

The Mougins-Valbonne area is filled with families from all over the world, has an international school, is 30 minutes from the beach and less than 2 hours to skiing. There are other locations in the Cote d'Azur -- in the backountry or closer to the sea.

But I second the suggestion to seek out one of the expat forums or FB groups.

How easy it is to get to Paris or at least a major international airport is also generally a factor.

OP's ideal criteria was even more specific -- 30 minutes to the beach (Toulouse is too far) and 2 hours to ski resorts (Bordeaux is too far from the Pyrenees). I should have added that Aix-en-Provence could qualify as well.

That’s a big decision to make and requires lots of research. Issues such as the type of visa requirement that you will have to meet will need to be your first step. If you need to work that’s a whole different ball game and French Government policy is to employ French people first. Then there is the language. While French people are very tolerant when you try, life is a bit hard until you speak reasonable French.
if you are looking to be self employed you will need a business plan generating a certain amount of income.

If schooling is required this will need research too, however all the above will have to be your priority.

Then there is the lifestyle changes. While France is a beautiful place to live, the administration part is difficult and each department has its own rules and regulations, and that can be very frustrating.

These issues can be overcome and I would recommend joining the group expats in France on FB as they have lots of correct information.

We researched for three years before making a decision, and then decided that a visit for 12 months would suit us better. We are retired though and taxation and inheritance laws would have had an impact on us.

Good luck with whatever decision you make, as it is a beautiful country and the people are fabulous.

One of my close friends has a house in the south and she loves being their in the summer, but the winter, despite being warmish is dire as so many locals just go indoors and stay there. I'd recommend trying rental for 90 days Sept, Oct, Nov just to get a flavour

‘One of my close friends has a house in the south and she loves being their in the summer, but the winter, despite being warmish is dire as so many locals just go indoors and stay there. I'd recommend trying rental for 90 days Sept, Oct, Nov just to get a flavour’

Definitely agree with that suggestion. France is very different in winter and in Nimes we needed a load of wood for the fire.

But winter is shorter, that’s one of the attractions. Of course you need heating during the winter months. Many houses have central heating or electric radiators, some have heat pumps. Some people might hibernate during winter, others find the time to do other things that can’t be done during the summer as it’s too hot, gardening in particular. Pruning vineyards takes place in winter and the olive harvest starts in November (or earlier/later, depending).

Nobody I know go indoors & stays there, maybe if it’s particularly wet then ok otherwise there is still the outdoor life and life in general continues outside of tourist areas. Locals still want to eat out & shop etc.

<< But winter is shorter, that’s one of the attractions. >>

Winter is shorter than where? We don't even know where the OP is from and only one post has been made.

do they stay indoors?
no but they no longer spend time out walking, gardening, chatting etc as they do in the summer

Some of these things wouldn't appeal to me at all as I like winter, it's my favorite season And I'm not a fan of beaches. I would have picked Toulouse as a vibrant city with job opportunities and more diverse and a reasonable drive to the ski resorts in the Pyrenees (like La Molina--Saint Laury in the Fr Pyrenees is closer), although farther from the beach than desired, I guess. But you can't find this unicorn probably that is a "hidden gem", like those would exist anywhere in that area. I don't think the OP is that interested and no mention was even made of jobs issues.

I also don't think people should move anywhere without spending at least some time there and knowing what it is like (at least not when it is totally voluntary and no hurry required). A lot of PACA is too right wing and conservative for my taste (excluding Marseille).. Frejus is run by the RN pretty much for example, a lot of those cities have very conservative mayors and populaces. I guess if you do too, that is fine, but I wouldn't want to live in places like that any more than as an American, I'd want to live in TX or FL.

Without needing to make unpleasant enquiries in any town in the south of France, you can tell immediately if a town is RN (ex-FN) or normal. If it does not fly the European flag next to the French flag at the city hall, stay away.

The South is a broad area, and the frigid lows and Mistral/other winds don't hit the southeast. I've had lunch outdoors this past winter, on the beach. But I do agree, check out a town -- but I'd suggest Jan/Feb/March to really see how it empties out. Also, I'm pretty certain people in the Grand Villes don't sit indoors all winter. The tourists leave in July/August but the locals are all about.

Nice is 1.5 hours from Isola 2000,

https://www.skiresort.info/ski-resorts/alpes-maritimes/