I think Montezuma is a unique town. While it is very very small, there is a centralized downtown (although it's just barely a few city blocks big). They have got places along the road to/from town and it's not as dusty as nearby coastal towns. They've got an ATM machine, a small grocery store and a tiny grocery store, lots of restaurants and a few bars. It's accessible by taxi boat, shuttles, decent bus service (IMHO). Lots of little hotels, I'd guess most have 10-20 rooms (a few with more and a few with less).
It reminds me of little towns up north in Michigan, a few city blocks with a few restaurants, shops and a school (except with hotels a few few tour guide offices) but not much other businesses for 5+ miles in any direction.
The beaches are a bit rocky, but I always wear some kind of beach shoes (or Vibram Five Fingers). And the waves are a bit rough sometimes.
It really depends on the kids. I've seen kids who go nuts when the get to the waterfalls. They just jump in and climb up the rocks (10-14 feet) and start jumping in and could hang out all day.