Just came back from Playas del Coco and I would not recommend this for a family trip. While my favorite people here, Tomato of Tomato Adventures, Heiner at Las Olas de Papagayo restaurant and Omar at Cafe de Playa made our trip very special (2 adult couples), the town is really just bars and restaurants and 1 casino. It also has many souvenir shops that stock the same things.
The beach is okay (it is dark sand and some people find it dirty) of which we did not. Other than Cafe de Playa where you can sit out on their lounge chairs (you need to buy at least one drink and should as the sand is hot and lounge chairs are really a requirement) there are other areas that would have more activities for the kids and better beaches to frolick in. Tamarindo may be better or an All Inclusive somewhere where there are structured activities for the family. With that said, Tomato from Tomato Adventures arranged phenomenal snorkeling and fishing trips where we were picked up right in front of Cafe de Playa, All of our other tours were 1 to 4 hours away so making Coco your base is not necessary.
Adults who want to drink and eat and have a great bar scene, complete with loud music, hookers and pimps soliciting,with occasional trips to the Casino (although I would not trust the payouts of any slots there, the cash poker game for a $20 buyin was fun), than this is a great place to take a vacation.
If you want peace, quiet and more family style activities, I would think of going someplace else.
Just my $.02