VanillaBean, this could be tough getting a house for y'all for that price & that many people. I can recommend some rental companies to see if they can accommodate y'all. Talk to Kimberly at :D http://www.realkeywest.com/. Other ones for suggestions are:
http://www.vacationkeywest.com/, http://www.housesandhomes.com/keywes..._township.html
http://www.vrbo.com/
http://www.vacationparadise.com/
http://rentkeywest.com/
http://keywestrealty.com/
http://athomekeywest.com/

As far as the weather is concerned it can get up to the high eighties but you always have some ocean breezes unless you are downtown on Duval St. doing the Duval crawl. It can get hot & muggy but that won't be every day. It may even rain & cool things off for a while then after the rain its hot & muggy, just have a margarita & have some fun.