I've been with a 5 year old, 3 year and 1 year old. Yes, it's very nice. We went for the interconnecting rooms - a junior suite with a twin, I think. This worked well us. They were ocean view rooms - some garden view rooms look out on road.
Supper we all ate together (a buffet) but I'm sure they'd fix up a babysitter for you (after all they sell themselves on being child friendly.) There is a kids club that we didn't use - so can't comment on that.
Not much of a beach to speak of - but nice little pool for the kids and bigger pool too.
Alyma just outside of Paphos town - few too many Neon lights and 'English pubs' for me. But still fun to walk down to harbour and get something to eat, and buy souvenirs etc.
We stayed for about four nights and combined it with the Anassa (sister hotel)where we stayed for three nights. (We loved the Anassa!)
Alyma shouldn't let you down - but it depends what you want really.