I have not been here myself, but have heard good things about it. http://www.terranea.com
It's about 15 minutes from where I grew up, and I can say that the location is fantastic -- a beautiful spot on the cliffs overlooking the ocean. (In high school I actually worked on the property in its former incarnation, which was Marineland -- a smaller, crappier precursor to Sea World.)
That said, I think it's more sprawling resort than small, intimate hotel.
Your impression of the Malibu Beach Inn is correct -- it's fine, but not great.
I imagine there are some nice places in Laguna Beach if you wanted to go that direction, but that's really no closer than Santa Barbara and not nearly as nice of a drive. (PCH > 405)
If you do bite the bullet and stay in Santa Barbara, you might want to check out http://www.spanishgardeninn.com
I stayed there this past fall and really liked it. It is not on the beach, though; it's a few blocks off State Street.