July 22nd to August 5th is high high peak tourist season even in the North Of Portugal,as menay Portuguese living in Northern Europe head home by car in their droves for the summer break.All the beaches from North to the South of the Country will be heaving. A "beach (non-touristy, good food, beautiful architecture)" at this time of year is probably impossible.
The other issue is that apart from the extreme north of the country around Bragança, and the Serra da Estrela, you should be prepared for temperatures that may reach between 30ºC and 40ºC. Not sure if this is ideal for a 4 year old and a 6 month old.
As regards a "a quaint non-touristy town", you probably need to look at Peniche or Nazaré or one of the towns north of Portugal.
