Lagos is not a "built-up" resort as in terms of Albufeira, Benidorm, Torremolinos.
It still retains the atmosphere of a "Portuguese" town. From the centre it is easy to walk to Praia de Batata and Pinhal beaches. Praia Dona Ana can be walked or bussed. Porto de Mos beach can be reached by local bus as can the 4km long stretch of Meia Praia just over the river.
In summer there is a small shuttle ferry over the river that takes you to the town end of Meia Praia in a couple of minutes.
As regards, accomodation I would also suggest you look at the following hotels:
Albergaria Marina Rio
Aqualuz Lagos
Hotel Marina Club.
These are also fairly well situated for east access to the centre.
The sea in July should be warmer but remember Lagos is located on the Atlantic and changes in sea current can mean the occasional period of colder water.
There are not many organised day trips available from Lagos. However, by bus one can visit Sagres, Salema, and Cape St. Vincent.
Also by taking the bus to Portimao you can also connect to a bus to Monchique, the small mountain that dominates the region.
I recommend you have a look at Cubsur's site for more bus info:
See: thomasallen.home.sapo.pt/travel/012.htm
