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We are now worried that we have wrongly completed our Esta's as we clicked yes for transit and now thinking we may have got this wrong. We will have proof that we booked 2 nights in Hard Rock hotel, then 1 week in florida villa then on to Mexico for 5 nights before flying direct home. Has anyone any idea about this or can steer me in right direction. We dont fly until April.

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What you're describing is not 'transit'.

Transit is when you're in the USA only for the purpose of getting somewhere else - for example your flight from home takes your to JFK (an airport in New York), where you then connect to another flight taking you to Montreal, or Mexico City, or wherever outside the USA.
Or maybe you land at JFK and take a cab over to LGA (LaGuardia airport, also in New York) to catch your next flight.
Whatever your travel plans are - if your actual destination is not outside the USA, then you're not 'in transit' for the purpose of an ESTA.

You're spending more time in the USA than you are anywhere else - almost twice as long - so it's clear that the USA is a destination in your travel plans (even if it's not the only destination).

I'd strongly suggest that you amend your ESTA to reflect your correct reason for visiting the USA to avoid any unnecessary complications when you arrive and possibly need to explain your plans to a CBP agent at the immigration point.

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