I will be visiting Chicago in early July (ugh, hot) with my husband and 4-year-old daughter for about a week. I would like to extend our trip with a stay at some other midwestern locale, up to, say a 3 hour drive away. My fantasy is to find somewhere we can rent a little cabin on a lake, even better if it were in a resort with kid activities. Price is not the biggest concern, ambiance and fun are.

There are tons of places like that in southwest Michigan. If you want Lake Michigan (big lake, think an ocean without salt and smaller waves) check out Harbor Country, South Haven or St. Joe, which are all within 3 hours. The Lakeside Inn in Lakeside, MI is in Harbor COuntry, right across the street from a private beach. There are tons of rental cottages and hotels in these area-we have a house nearby so I'm not that familiar with the resorts. Anyone else want to chime in?

Thanks for the ideas. Someone else mentioned Harbor County to me as a good Chicago-close place to look.

Does anyone else have any more specific suggestions??

As Swalter posted above there are tons of places like that along the coast of Michigan. I would not recommend St Joe, we always dry-docked our boat there and were never crazy about the town but South Haven, Grand Haven, and Saugatuck would be worth looking into.
http://www.saugatuck.com/index.asp

How about Michigan City, IN. It's about an hours drive from Chicago. A friend stayed at Beachwalk and loved it.
http://www.beachwalkresort.com/beachwalk-resort/.
You can also find some great places on vrbo.com.

when I wnat to leave the city for some rest and solitude, with water--my family goes to Lake Geneva Wisconsin. Its about 1-1/2 hr. north of Chicago---you can check out the Grand Geneva resort--fairly upscale but not on a lake---The Abbey resort is also an option--probably has activities---and has pool and on lake geneva---Also Lake Lawn resort is very family oriented--last time i was there had a mini golf course, boating--and i've heard they've renovated it---I don't know of any other family resorts on lake michigan--unless you to up to Michigan---Personally if I were taking my family to Chicago, I think i'd enjoy all of the wonderful activities the city has to offer---a cabin by the lake is just not "chicago". We have fabulous museums, tours, two great zoos, navy pier loaded with childrens activities including a children's museum, great beaches just blocks from the "magnificent mile", biking. parks,specifically LIncoln park with the zoo and beach nearby---Millenium park---the list goes on and on---it would definitely not be hard to plan activities in and around chicago. Enjoy Chicago. Its a great city!

Yes, Lake Geneva, Wisconsin, is within your 3-hour drive time, and it is very nice, but it's pretty built up--no cabins there. Door County, Wisconsin, would have what you're looking for, but is probably slightly over 3 hours away from Chi-town. The northern half of Wisconsin is full of beautiful lakes with cabins, but not that close to Chicago.

thanks so much everyone for your replies. i now have a lot to study!

If you're considering the Michigan City Beachwalk, be aware that the Lake is across the road and quite a walk, you don't even have lake views there.

I was going to suggest you travel to Michigan City, even before I read all of the posts...lol...it's where I live!
The lakefront here is beautiful! There is admission fee to get into the large lakefront park ($5-6?) on a holiday weekend. There is a small zoo (Washington Park)right there (adm fee)which is great for a 4 y/o.
Contact Long Beach Realty. They have beach rentals. Also they may be able to put you in touch with a reliable, trustworthy babysitter if you want to go out for a night. The owner and some of the staff are friends of mine. Although Beachwalk is nice, but pricey, although it's not ON the beach, it's really not a far walk. Michiana Shores has many rentals on VBRO. It's the last little "burg" before Michigan. The longest walk from any rental is about 1/2 mile, but very wooded and quiet.
E-mail again if you need more information! Have fun!

On the Door County idea- it's 4 hours and 57 minutes away per Mapquest, and 286 miles. Was just there last weekend. Very nice, but quite a hike from Chicago and not 3 hours away. Sturgeon Bay is closer,but not really considered by most to be a Door County destination. I consider Fish Creek to be in the center of things, so used that town in my calculations.

I second the idea of Harbor County. Sand dunes, beautiful sunsets, beautiful beach, wonderful restaurants and accommodations ranging from small B&Bs to cabins to motels/hotels. New Buffalo is a wonderful little town but no need to stay there. If you have a car then Union Pier or Lakeside communities would be my choice.

http://www.harborcountry.org/index.php

Some places in southern Wisconsin, within a couple of hours, in Kenosha county, Paddock Lake, Silver Lake, Twin Lakes, Powers Lake, Camp Lake. In Racine County, Brown's Lake/Burlington. They all have places around the lakes for rent. Not sure what would still be available at this late date though. Brown's Lake & Paddock Lake were my favorites growing up. Also spent some time at Gunn Lake in Mich. A little bit farther away in WI, near Princeton & Montello, is Lake Puckaway & Green Lake, & a bit farther north of that is Shawano Lake. Again, numerous cabins for rent around those lakes & some resorts also. Do web searches on those areas if interested.