Somerset and Dorset are most definitely the Southwest! The former Kingdom of Wessex is what is now Hampshire, Wiltshire, Somerset and Dorset. I believe that officially, the SW is Dorset, Somerset, Devon and Cornwall, though Cornwall is more its own entity, with a Celtic heritage and a different history than Wessex.
I have only done self-catering in the New Forest, but pretty much anywhere in the West Country will have something good to offer. I agree with woadgrrl that Trip Advisor is a good resource. In Somerset and Dorset, I would recommend Bath, Cheddar, Dorchester and Poole. Even if you don't want to stay on a farm, it's well worth driving around and exploring the little villages, especially in the springtime they are gorgeous, with flowers everywhere.
If they're looking for someplace warm, there are nice beachy towns along the south coast, like Poole, Bournemouth, Bognor Regis, Weymouth, etc. Although, even if the sun is warm it's still likely to be windy. I live in Dorchester, and was in Somerset for a year, so if you have specific questions feel free to PM me