HI,
Glad you have decided to return to our area! It really is a great vacation spot for families!!
I haven't been to Midway's waterpark in ages, but from what I recall...it had 3 main waterslides. They added a lazy river and a kiddie activity area a few years back. Jungle Jim's has a kiddie pool & a wave pool in addition to waterslides,lazy river and an activity pool. I've never been to Jungle Jims' though. IF you go to their websites, you might get a better feel of what the park has. Midway's has a neat 360 view that you can take a peek at. Not sure about Jungle Jim's, but Midway offers lifevests for the little ones.
http://midwayspeedwaypark.com/water-park.html
www.funatjunglejims.com/index.php…
Since you have been to the area, I'm sure you are familiar with Funland. That is a definate must do with little ones. A couple places that might interest you are Dawn's Country Market on highway One in Milton & Holly Lake Campsites. Dawn's Country Market has a small farm animal area next to the market. The kids can take a peek at the animals--chickens, goat, pig, cow, etc. It doesn't cost anything. You can stop on your way in or out of town. Holly Lake Campsites (down route 24) has a petting zoo on location. I have visited it a few times even without camping there--just call ahead OR talk to the registration desk. They also have pigs, goats, turkeys & etc. IF you think the kids would be interested in seeing an old lightship, check out Lightship Overfalls in Lewes.
As far as restaurants go:
I would recommend Big Fish in Rehoboth. It is pretty family friendly. Plus they have paper tablecloths & give you a cup of crayons. That should keep the kids busy while waiting on food. They have a kid friendly menu with hot dogs, chicken fingers, spaghetti & meatball, fish sticks, meatloaf, etc. http://bigfishgrill.com
Another place that I think is pretty family friendly is the Cottage Cafe in Bethany. It is a little bit of a drive from Rehoboth (about 30 minutes south), but the food is pretty good. They also have a kids menu with burgers, fish sticks, chicken, pasta, grilled cheese, meatloaf & their DELICIOUS pot roast. IF you go, definately get the Sand Dune fries for the family to split! http://www.cottagecafe.com/
Hope this helps some!