That is logical route for traveling around, though I'm not sure if it's necessary to go through Trieste unless you want to stop there.
Don't forget to buy vignette in Slovenia. Motorway is tolled in Croatia at exit, and there is also a bridge with around 1,20€ toll on the western part of Istrian motorway. Tunnel Učka, at the easternmost point at the map, is 4€ toll. You'll be passing next to Rijeka, you could consider taking a walk through the city center. There are no specific attractions to see, but it is 3rd biggest city in the country.
By Montuva you probably mean Motovun. There's a film festival there starting at 25th of July, if you're interested.
http://www.motovunfilmfestival.com/page/index/id/78
You absolutely must not miss Rovinj, and I highly suggest Poreč and Umag too. I suggest visiting the castle in Pazin too, it sits on the edge of huge cliff, amazing sight.
I was on excursion in Istria with school as a kid, and in army veterans resort few years ago, so I can't recomend places to stay. In general you have a choice between the hotel and apartment. I prefer an apartment, with your own kitchen and crap. Also less neighbors. Also don't know anything about car rental, always travel by own car or public transport. I really can't reccomend anything, I have no idea where I ate and what I did or what was the food like. I'm a bad tourist.
Might want to try asking or at least checking at trip advisor forums or similar for car rental and accomodation suggestions. You could also ask whomever you have accomodations with for suggestions about car rental.
August is the worst, Italians have collective vacations and a bunch of them come at once and mostly to Istria.
some useful links
http://www.istra.hr/en/home
http://www.istra.hr/en/accommodation...list-of-hotels
http://www.apartmani-hrvatska.com/en...stra/index.htm