is going to be your best bet if you want to be close to the water. There are a number of them within a small walking distance to the beach. The hotels are all miles away on Phoenix Rd. North Shore drive has a couple of B&B's also which are right across from the beach. The one you mentioned is very nice.
When you do the beach thing, go to Packard Park off North Shore. It has decent bathrooms and you don't put up with the mental degenerates as you do on North Beach. Not so crowded.
We go there every weekend in the summer. One of our favorite spots.