Hi LEM,
Welcome to the forum. Yes, the Norte passes through a lot of coastal tourist towns, all of which will be busy in July, but nowhere near as busy as they will be in August. That makes the albergues a much more attractive option, since they are not open to those tourist crowds. And many of them do not take reservations, so you should be fine. Check out the gronze list of accommodation on the Norte, or the eroski site, which also lists all albergues. There have been a lot of new albergues opened over the past few years on the Norte, making you less dependent on the hotels/pensiones, etc, whose owners cater to tourists over pilgrims.
There are so many beautiful cities (San Sebastian, Santander, Bilbao) and so many gorgeous towns (Castro Urdiales, Luarca, San Vicente de la Barquera, Llanes, Ribadeo, Comillas, in no particular order), and so often even if you are not staying on the coast, you will be in a town with a lovely beach just a km or two away, and walking out in the afternoon is a treat, especially when there are cafes there for sitting a relaxing (I remember that in Colombres, for instance).
And I would also add a little pitch for yet another touristy town on the coast, which requires a detour of a km or two -- Cudillero is one of my favorites.
Buen camino, Laurie