Taking the kids (7 & 13) to LA and looking for a hotel that's reasonably price ($125 nt range) and yet centrally located to or between the following areas: Venice Beach/Hollywood/Santa Monica Pier/Fashion District (Santee Alley). I found the Wilshire Grand Downtown ($120) but afraid it might be too in the middle of the city (we'll have a car)?

In that price range:
Hilgard House near UCLA

Holiday Inn Express on Santa Monica Blvd near UCLA

Definitely not Wilshire Grand

I agree that downtown would not be the ideal place to stay for your itinerary. You'll be close to Santee Alley, but that's about it.

My standard answer, especially for families, is to look into the all-suite hotels near LAX, in the El Segundo area (not Inglewood or Century Blvd!) There are several which are in your price range, have a small kitchen to store drinks and snacks. Some even offer a complementary breakfast.

These hotels are about 5 minutes from Manhattan Beach and right off of the 405 for easy access to other LA attractions.

Good Luck!

The Omni (downtown) seems to get excellent reviews on Tripadvisor. It may be just a bit out of your range, though.

Don't stay downtown. It's just not where the action is in L.A., and it's also not close to the majority of locations you're interested in seeing.

There's a Courtyard by Marriott on Olympic Blvd. in West L.A. that is definitely in your price range. It's much closer to the beaches, and also very near Beverly Hills and Westwood.

Erin has good advice. West LA is centerally located for all you want to do.

I agree with lvk... I try to stay near LAX for the fabulous bargains at hotels that offer Breakfast and plenty of room. I generally try to stay somewhere near Manhattan Beach/El Segundo.
Hawthorn Suites
Ayres
Embassy Suites

Try looking at the CalMar Hotel/motel in Santa Monica. Its a converted apartment building a couple of blocks from the beach... I think on California Ave. We used to stay there when we visted LA since its so convenient and had kitchens...