The Witterings are really uncommercial (& therefore unspoilt) but this does mean there is a lack of hotel accommodation.
Crouchers is about the only hotel on the peninsula but it is about 3 miles from the beach. The Beach House in West Wittering village is a stylish, New England clapboard cafe/restaurant with a few B&B rooms.
The Crab & Lobster in Sidlesham is a pub with a reputation for outstanding seafood and happens to have some accommodation listed in Mr & Mrs Smith.
That's about it as far as hotels are concerned.
Private rental is your best bet.
If you have children, my advice would be to stay somewhere very close to the beach. I've never seen the point of going all the way to the seaside and then staying a car's drive away from the beach. Staying right on the beach means that time on the beach can be spontaneous and much more enjoyable. You can pop out to look at a rainbow or a sunset, you can walk out with your morning coffee while the kids search for shells. You can be on the beach when noone else is there. It's very special. The trouble with West Wittering beach (the beautiful white one) is that it gets very crowded near the car park on a sunny day and all the houses on the beach (On West Strand and East Strand) are huge piles. I don't know your budget obviously, but unless you're after a 6,000q/ft house with a pool, you won't be on the beach in West Wittering. There are plenty of houses in the village but then you'll be looking at a walk to the beach. West Wittering village consists of a handful of basic shops, one coffee shop, one cafe and one pub.
East Wittering is the next bit of beach along to the east (obvs) There are lots of great houses along the waterfront, many are for rent. Roads like Marine Drive West and Marine Drive are pretty perfect IMHO. You're on the beach, a short walk to the west is West Wittering beach and the glorious sand spit of East Head. A short walk to the east and you're in East Wittering village, where there are small supermarkets, chemists, gift shops, surf shops, cafes and great restaurants like Drifters (new) and Samphire. Houses on the front charge a premium of course but they're so worth it.
Also consider going further East to Bracklesham Bay - still part of the Witterings. It was once the poor relation but is really on the up. East Bracklesham Drive and West Bracklesham Drive are private beachfront roads and well worth a look. There are some fantastic beachfront houses. At the start of East Bracklesham Drive is Billys On The Beach, the area's only beachfront cafe. It's fully licensed so on a summer's day you can sit outside with lobster and prosecco. On a winter's day you can watch the waves from the safety of a seat inside next to the log burner. At the other end of East Bracklesham Drive is the UK's newest RSPB bird reserve, which offers about 12km of running/cycling/walking tracks through floodplains where you'll see extensive wildlife. I can highly recommend cycling through it all the way to Selsey and having lunch at The Seal before cycling home. Time it so that you're back on the beach at Bracklesham for sunset over the Isle Of Wight. If you time it really well you can get to Billy's for a sundowner and a bucket of calamari.
We don't rent our place out yet but have a look at Sunshine, East Bracklesham Drive (on Owners Direct) and Spindrift, Marine Drive West (on Air B&B)
Both owned by good friends. Both really great houses and great value. I don't have any commercial interest, just a passion for the area so pls inbox me if you want any help.