While the islands in Thailand look and probably are exotic, we're looking for a town where there's a good beach so that there's a wider choice of eateries, more to do and easier transport from an airport.
Any ideas? Also, comments on my assumptions re eateries etc most welcome.

ttt

All of the major beach areas of Thailand have enough development that there is a wide choice of eateries, entertainment, etc. Your choice will most likely depend on the time of year you are going, since the various islands (or mainland areas) have different rainy seasons.

You might consider Phuket, Koh Samui, Krabi or Hua Hin (if you prefer to travel by road rather than plane form Bangkok) as having easy transport options.

Thanks Kathie, we're aiming at the second half of March.

We're also considering Penang, Malasia, so any comments on Thai beaches versus Penang would also be appreciated.

The beaches at Penang are not as nice as the Thai beaches. There are other places in Malaysia will fabulous beaches. I'm just back from Penang - we didn't go for the beaches. You may want to read my trip report posted a couple of days ago.