1. Remember that Tybee is only a little over one mile long, so which end is more or less crowded in the summer really varies on bookings at individual condos/hotels, and can vary day to day, but bet on both ends being crowded.
2. Your best bet with a large crowd is to change your eating hours so that ANY restaurant can accommodate your group (also may qualify you for early-bird specials). You mentioned grocery stores, so I assume you have a condo w/kitchen. Cook breakfast in your room or get someone to go out and bring back cheap breakfast from a fast food place (most have some kind of 2 biscuits for $3.00 deal). Skip lunch, eat dinner around 3-4pm, have some snacks in your room for late-night. Otherwise, you will be stuck with the usual chain-restaurants that you have back home (red lobster, olive garden, long horn, or outback).
3. Put "kids or children" in the searchbox above your question, and search the "savannah forums" as well, as this question has been answered multiple times in previous posts. Walking the River Street area is friendly to all ages. You will have to judge other activities based on your knowledge of your group. But there is one opportunity not to miss that will only cost you about $10.00 for the whole group: Buy two crabbing/fishing nets and two cheap flashlights at Walmart. When you go out on the beach at night, the little tiny white crab's eyes will glow when hit by flashlight light, your kids can then chase, catch, and release the crabs, while the adults stroll the beach -- I promise you it will be the most fun your kids have had in years, assuming they are above age 4-5.
4. The more in-land you move, the cheaper the groceries get. Typically Kroger and Ingles (you need their loyalty card - free) are the cheapest stores with the most selection. Super Walmarts tend to be cheap on shelf items, but high on meat. Publix is highest, but also typically has the best quality produce and meats. We tend to stop at the Kroger on Abercorn Street near I-95 (think its Hwy 204 at the I95 exit) before arriving at our hotel (you may not have room for groceries on the way in) which is a little out of the way, but Abercorn takes you straight into Savannah, or you can get back on the interstate.