We stayed in Provo over the holidays, with a group that involved older parents (late 60s with knee problems), mid-30s, and a four-year old and a one-year old.

We rented through VRBO one of the properties at Coral Gardens, and it was an okay facility. The building management was accommodating enough, and the property was well-situated on Grace Bay.

The BEST part of the location was indeed the beach and the snorkeling. The reef is gorgeous and accessible. And the Somewhere Cafe which is next door is a fine place to grab a bite when needed, but not great food overall. There's not much else that's great in walking distance. The hotels on either side (West Bay Club, Gaensvoort, and the Wind Song) had decent restaurants but not spectacular. And the Somewhere Cafe could be LOUD at night, which might be bad if you have kids with you.

Our favorite place became the Tiki Hut, which I'd read about on here. It's in Turtle Cove Marina, which is pretty bare bones, but the indoor/outdoor setting and delicious menu is well worth it. And it's reasonably priced. Great place for kids.

We checked out Hemmingway's closer into town, which was nice enough, if a bit overpriced for what it is. In general, I felt that, if you're a foodie in "real life" you'd be disappointed by food options on vacation in Provo. You'd probably do better sticking to the local places, like Da Conch Shack and Tiki Hut which have no pretenses, though perhaps Grace's Cottage and some of the REALLY high-end hotels have better fare.

If you have people in your party who can't snorkle, the Undersea Explorer trip might be worth considering. It was a bit overpriced for less than an hour, 20 minutes of which is spent getting in and out of the marina, but it's pretty neat and better than a glass-bottomed boat.
http://www.caicostours.com/

The short trip to Iguana Island is also worthwhile as an alternative. Again, it's a short one-hour round-trip, and worth bringing a bathing suit to have a dip in the lovely shore on which you land, especially as it can be HOT, even early in the day, with little shade. 2 of the 3 boardwalk paths were destroyed in the recent hurricanes, so it's a very short little path to see the Rock Iguanas. If you do this, make sure you bring GRAPES, which you can feed to the iguanas, and it's amazingly engaging.

Some warnings:
- Food in general is unbelievably expensive. Even shopping from the brilliantly stocked IGA Market (a cab ride away) was easily triple what you'd pay in the states.
- Cabs are also expensive - priced per person NOT per trip, and they vary wildly depending on the driver - so be sure to ask prices in advance.
- Absolutely leave 3 full hours at the airport. While there's not much there, the security line can be an hour wait, so best to bring food with you and leave extra time.
- If you want anything to play with in the water (floats, sand castle stuff), you should bring it...snorkles are plentiful, but other kids or pool leisure stuff is picked over. We got something called the Sea Explorer float with a clear window that can be taken into the ocean, great for kids (and adults) who are too young to snorkle:
http://www.amazon.com/Sea-Window-Explorer-snorkeling-raft/dp/B000TVTLT6