My wife and our three kids all traveled across all of Mexico for 16 months, back in 2016/2017 living out of our VW Bus at the time. Never felt unsafe, except maybe in big cities but no more than I would if I were at a cheap motel in Chicago.
1. Route suggestions
It sounds like you're planning on sticking to the coast, but we preferred San Felipe, down MX 5 to Puertocitos where there's this cool hot spring right on the Sea of Cortez. Cook you up hot at low tide, freezing at high tide, so all in between its a mix of the hot springs water and cold sea water. Fun stuff. Except from there you hit a dirt road (at least it was dirt back then, maybe they've finished paving it by now) but it's got this famous place owned by a colorful character named Coco.
2. Security issues, precautions
The whole driving at night thing is really more about not hitting animals or falling into a massive pothole than safety. For sure, bad things happen in Mexico. They happen in the US, too. My favorite take on safety in Mexico came from Canadians, who are more prevalent than Americans down there. "Our scariest part of the trip," they would say, "was driving through America." When you think about all of the shootings here, the gang violence, there's really no reason to think it's any safer here than in the very remote Baja.
Traveling in a VW Bus, we were often on the side of the road fixing things. I don't believe 1 single car (aside from American travelers) ever passed us without stopping to make sure we were okay. Even if they couldn't help / didn't know how to work on vehicles, they still always stopped.
The Mexican people, all across the country, were so friendly to us. We were asked to park in driveways, fed, and always offered help even though we were the "rich Americans." That said, they really like families and people have pointed out that since I had three kids with me, that may have more or less given me a free pass where others may have had more of a hassle.
3. Suggested camping spots
Once you get into Baja Sur, check out Agua Verde (super steep, winding road to get there though) south of Loreto if you're into being remote and on a beach.
For a change of pace, after you've soaked up all of the beaches you can, there's a cool waterfall / swimming hole near Los Barriles by the name of Rancho Ecologico Sol de Mayo. It's kind of a national park type vibe, but they also have surprisingly amazing steak. And Los Barriles, though very American/Canadian, is a fun town and you can camp for free on the beach within walking distance to the shops and bars there.
There's also a bay near Guerrero Negro where the whales come in to mate, and you should be getting there just about the right time. Bring whatever you need, as it's like $5 or $10 to get in, then free camping for as long as you stay but if you leave you pay to get back in again. There's a restaurant and guys you can pay to take you out on a boat to see the whales. They came right up to our boat and seemed like they wanted us to touch them. Pretty amazing stuff.
4. Suggested towns and hotels
I'd say exploring these is half or more of the fun, hit up every one you can!
7. Road conditions
It's so varied, following the speed limit is probably your best bet since at any moment a nice,paved road can just disappear into dirt. :P
9. Anything you may find helpful, fun or interesting
Get Duolingo and try and speak to folks in Spanish. Plenty of people will know English, especially at restaurants, but putting forth the effort to speak Spanish will get you brownie points. Until they start speaking back and you have no idea what they're saying.
Best of luck and have fun!