I too like the Hancock observatory better than the Willis (Sears) Tower, but the Willis Tower has the glass bottom observatory now. So that would be worth going to.
I would say for kids go to the Museum of Science And Industry. That is your best bet to keep them interested. Remember most of these museums have fees for other parts. For instance the aquarium has a sepearte fee for the oceanarium inside it.
The Brookfield Zoo is spectacular though it’s in the suburbs. The Lincoln Park Zoo is OK but it’s free and in the city (north side) and easy to get to via public transit.
Visit the CTA site for information on bus/train schedules and passes
The cheapest hotels are in the suburbs. It’s a heck of a lot cheaper to get a suburban hotel and take the Metra (Suburban commuter train) into the city
I would use sites like Priceline and Hotwire to get a room in Chicago. The ADR (average daily rate) of hotels in Chicago, has fallen a lot. An advanced booking should get you a hotel in the $100 - $150 range depending on which type of hotel you stay at.
Hotwire and Priceline can cut this down to between $60 and $100 per night. Of course you don’t know where you’re booked at and you have to BE VERY CAREFUL about booking and refunds (usually none) and schedules and such. But if you’re flexible those two are great. But if you have special requests, like handicapped needs skip them.
A pool will only jack up the cost of the room a LOT in downtown Chicago and you have Lake Michigan Beaches a few blocks away. If you stay in the burbs you can usually find pools at little or no extra cost.
If you want thrift stores and boutiques and such, there are two fun options. The real experience is Milwaukee Avenue. Start at Milwaukee and North Avenue and move NORTH on Milwaukee. You get all sorts of thrift stores, and fancy boutiques because Bucktown / Wicker Park is changing to Yuppie.
You could also look around Broadway and/or Clark. Start at Armitage and move NORTH or SOUTH. Tons of overprice little shops and thrift stores (they’re VINTAGE stores over there)
You indicated your driving. OK beware parking is NOT free in Chicago. In the suburban hotels it’s free (but not the close in suburbs near O’Hare). That can run you $30 a day up to $100 a day. Some places have in/out privledges (meaning you can come and go as often as you like). Some places do NOT have in/out privledges so you pay the fee each time you go in and out.
You don’t need a car in Chicago. Busses and subways and el trains are safe, provided you use common sense.
As for Elk Grove, look for a hotel with free transport to O’Hare. You hop their shuttle and take it to O’Hare and take the Blue Line Subway/El from O’Hare to Downtown. It’s an hour trip and $2.25 one way for adult fare. A daily pass on the CTA (Chicago Transit) is $5.75 and is unlimited rides.
Note that if you buy a pass, Elk Grove is suburbs and the Pace (suburban transit) doesn’t accept CTA passes (except Monthly passes and special marked weekly passes). Otherwise your 1 or 3 or weekly CTA passes won’t work on Pace. The regular fare cards between Pace and the CTA work with each other.