All the places in your list are worth going. It is hard to decide what to or not to include! Here are some more thoughts:
If you are picking your rental car in either Chitose or Sapporo, driving down to Hakodate may involve a steep drop-off fee.
Otaru is small and its major sites can be toured in less than a day just by walking.
From Otaru it is only 30 min drive to Yoichi with another hour to Cape Kamui, so both can be done in a day.
For Lake Toya and Noboribetsu, we just spent a night in Lake Toya and did a side trip to Noboritbetsu in the daytime.
With a 3-year old, I would re-iterate the suggestion of going to Asahikawa. Asahikawa has a very interesting zoo which I think children will love. In town is the Ramen Mura where my wife said she had the best ramen in Hokkaido. To cool off the summer heat, you can visit the Snow Crystal Museum/Snow Gallery. If you use the expressway, Asahikawa is less than 2 hr drive from Sapporo and only 40 min from Biei
For driving in Hokkaido, you can use the following to get an idea of the estimated distance and time: