Thanks for the post and welcome to the Garden Route .
I hail from Johannesburg where crime essentially forced me to move my family away to the Garden Route in 1996. Sadly, it would be untrue to say crime in our area has not increased over the last 13 years. It has, although I have never felt "unsafe" in my home town of George, nor at any stage of my frequent trips to the various towns along the Garden Route. We live in central George, have no fence and the biggest problem we have is visiting dogs who somehow find our lawn a good place to leave their processed food.
There are many factors that influence crime of which population growth and unemployment are major factors. In our area most violent crime is usually related to alcohol abuse and I cannot recall ever reading about a hijacking in our area. We are warned that incidents of burglary are on the increase and that we should be wary, isolated muggings in certain parts of town are on the increase and so on, but the reality is that our area is growing rapidly and sadly so is the crime. I would go as far as to say there are certain parts of town where it would be risky for a child or a woman to go walk-about at certain times, but I guess this would be true for every town in the world.
Living in a gated estate obviously is very secure and it is very popular and you would certainly be safe in both George and Knysna.
As far as schools go, Holy Cross and Glenwood Primary have excellent reputations. Knysna has less choice, simply because they have less people.
Personally, if I had a choice between a school in a bigger city or one in the Garden Route I would not hesitate to choose the Garden Route.
George is more industrial and has a larger business sector, whereas Knysna is far busier when it comes to tourism. Peak hour traffic in both towns is probably when the Mom's drop off or fetch kids at school.
Perhaps other locals can add their opinions to this post
Best of luck .