The Baja trip probably won't be as relaxed as your hoping for. Tale a look at Walt Peterson's "The Baja Adventure Book." He has incredible detail about roads, ranches etc...
1. What are the highways like?
Not heavily trafficked by US standards, but no shoulders and a good amount of commercial traffic, especially in the populated areas. Some areas are pretty rough. It's been a few years since I was on the East Cape roda, but it's rough and not all paved. Peterson's will have good information on it.
2. Are there alternatives to the main highways? The re few. The cape area has a loop. Once on the East Cape, it's quite a ways until lodging. It most likely will require camping. There are some amazing beaches there, remote, beautiful and remote! Bring everything, including water.
3. If we do this loop, should we go clockwise or counterclockwise? (or does it matter?)
Don't think it matters.
4. How expensive is it? I've heard people say Baja has $20 hotels, but the bottom tip is more resort-y and maybe there aren't cheap hotels there?
There are cheap hotels in the tourist zone. More are expensive though. You can find a bargain if you look a bit.
5. Safety? Most information I've heard says Baja is quite safe, moreso than the rest of Mexico, is that true? If we camp could we sleep on the beach?
I've spent many trips surfing and camping on the beaches all up and down Baja. Most areas are safe if you use your head. Occasionally issues pop up but those are relatively rare.
6. I plan to get the Baja Almanac (http://www.baja-almanac.com/
), is that a good resource? Is there anything else I should look for? Specifically I'll want to know about elevation, road condition (paved/dirt), location of towns and services.
Again, Walt Peterson's Baja Adventure Book. It's not a Bike Book, but a resource that has mile marks, water stops, restaurants, recreation opportunities, natural history, plant and animal life, etc... I have owned three different editions of it and won't go to Baja without it.
7. Most importantly does this sound like a good idea? Does anything else come to mind that would give us what we want (North America, warm and sunny in February, total length of a few hundred miles at most, opportunities for relaxing along the way).
I personally like Baja a great deal. If the East Cape road from Los Barriles to San Jose is paved, you have the makings of a very fun ride. If not, that section will slow you down a lot. It's also beautiful, quiet, full of nice people, both Mexicans and ex pats. There is great snorkeling at Cabo Pulmo and Los Frailes. The beaches farther south are perfect for camping. From San Jose to Cabo is touristy and ugly, but from Cabo up the west coast to Todo Santos and backover to your start is gorgeous terrain, ocean front, then inland across mountains.
Good luck with your planning.
George SLO CA