If you're only there for 2 days? I want to make the most of our time there, any suggestions?

Get a boat pass and surrendipitly (?) explore Venice by water - the highlight of Venice for me was a vaporetto (public transit boats) down the Grande Canale at night, where the faded and cracked pastel facades are wonderfully illuminated as they mysteriously glide by.
2nd, i'd do a boat trek out to an island or two if for no other reason than to see Venice from afar over the water - and almost be amazed as ancient mariners must have been when they first glimpsed this wonderland looming across the water - Venice to me is most evocative when seen from across the lagoon.
Ducal Palace would be way down my list - the main sight in Venice to me is Venice itself - and not the main well-trodden drag between the car park/train station area and St Mark's Square - often elbow to elbow in tourist season, but its many off the beaten track piazzas, side canals and the Via Garibaldi area - Arsenale area on the east end - few of the hoardes of tourists even get to these places, where cats still rule.

How many of the churches do you want to see? In 2 1/2 days we squeezed it in (along with the secret itineraries tour), along with the campinele, the inside of St. Marks and about 4 churches, plus shopping, plus Murano. It's doable.

Are churches the main attraction in Venice? I really dont know!!! Ive just read a couple travel books about it and there doesnt seem to be much "must do's" outside of the canal.

No, the churches aren't the "main attraction"; but some of them take a boat ride or a bit of a walk to get to, so if you had those on your itinerary, it would take up some time.

We didn't visit any art musuems in Venice, having taken the kids through the Vatican Museum in Rome and the Academia and Uffizi in Florence. There are several in Venice to consider, if you won't already be on overload.