I read that Mexico is working to get rid of the FMM, which they have done for US air travel, but for car travel, it's still required. I had my FMM stamped in Algodones and had to return it to immigration when we got back.
The whales in Guerrero Negro were amazing! We took Russ' advice and went with Laguna Tours. The hotel he recommended was booked, so we stayed at Hotel Caracoles- they have great/clean rooms, a nice restaurant, coffee bar, gift shop next door and everyone was very outgoing. (I would definitely stay there again). One night we ate at Hotel Malarrimo, and while the hotel was old and interesting and the food was good, no one there was very friendly.
The Gray Whales are much more curious and friendly than the fin or hump back that you see in Penasco, and we got to touch them- experience of a lifetime!
Along with the whales, we also did the salt mine tour of the biggest salt operation in the world- it was really interesting.
On the way back, we ate at Hotel Las Palmas (Alfredo's restaurant) in San Felipe, and since the previous owner invented Fettuccini Alfredo, we had to try it. Excellent! He has an interesting story- originally from Italy before he became famous chef in Mexico City for politicians and stars, but decided in the 80's to "retire" to run a hotel in San Felipe. The hotel and restaurant are charming, 1950's Mexican style, but unfortunately, their view has been lost to high rises in front.
Google maps said the trip to Guerrero Negro would take about 12 hours, but we did it in about 10.5 hours. The roads going down were deserted, but returning, there was more traffic, and the border in Algodones took about 45 minutes.