Jim,
We were there last summer (very end of August, first two weeks of Sept), and the first couple of days it was humid and verrrrrry hot and I thought that maybe we wouldn't really enjoy our vacation due to the extreme heat. It got better after a couple of days (humidity went away) and we fell into a nice routine of pools at our resort in the morning, then naps and relaxing in our villa in afternoon or doing an outing somewhere, then pools again after dinner. It was one of our best family vacations we've had because it actually felt like a real vacation, we didn't come back exhausted and the kids loooooooved our routine.
We have young children (15 months and 4 yo at the time), so we didn't do too many outings away from our resort. You will want to do more.
Definitely need water shoes for the whole vacation, including using the pools at your resort.
The Living Desert is wonderful, but you will need to go first thing in the morning and leave before lunch. The animals won't be active when it's hot.
The tram to the top of Mt. San Jacinto is a great summer outing because it's 20-30 degrees cooler at the top. Yeah!
There is a Children's Science museum in Rancho Mirage. Haven't been there yet but heard good things about it.
In Indio there is an indoor warehouse/party place where they have lots of different bounce houses and they have open play times throughout the week. CAn't remember the name of it right now. We didn't visit it, but I'm glad I know about it for future reference since we go out there a couple times a year.
Although CAbazon is a great outdoor mall, the problem with it in the summer is that it's outdoors. The kids will be bored to tears here, so I wouldn't recommend it, although your wife may like it!
We often stay at the JW Marriott in Palm Desert villas property and the main hotel gives free boat rides from 4 to 5pm. everyday. It's a 5 minute ride around their lakes and is basically a commercial for their property and restaurants. The kids won't know or care and they would really enjoy it. And did I mention it's free?
There is a wonderful restaurant/shopping/theater complex in RAncho Mirage called the "River" you will definitely want to check out. It's quite spectacular for a shopping area and your family would enjoy dinner and a movie there one evening.
This topic has also been discussed at Tripadvisor, so you may want to check that out!
If you had a cool morning and wanted to get up early, a short hike at the Palm Canyon in Indian CAnyons is a really beautiful experience. Definitely something to do only ifj you can get there early.
Have a wonderful family vacation! We love it there.
Janna