Uptown Station in Fort Walton Beach has a plethora of dining options: Five Guys, Clemenza's, Wild Wings, Zaxby's, several Asian options. I like Tommy Mattonie's on Eglin Pkwy for lunch, Stewby's is a local seafood option that's good (a bit off the beach). On the mainland, the dining isn't as expensive as Destin. There's a Fusion Bistro at the corner of Eglin/Hollywood close to the island that's fun and decently priced.
The Boardwalk has several dining options: Floyd's, Angler's, The Black Pearl, Crab Trap. A bit more expensive than in Fort Walton.
You don't say if you have boys or girls, but my tween girl loves the consignment shops & flea markets in downtown Fort Walton Beach. The Closet Swap on 98 is my favorite, and the flea/antique shops on Eglin are fun.
My teen boy likes the jetski rentals, and likes to net crabs on the sound side. If you snorkel in the pass, please be careful and aware of the tides.