Agree with PP that Ambleside is a gorgeous base for a Lakes holiday. Lakeland Retreats is a really reasonably priced local company that has great, comfortable cottages.
Other holidays we loved when DC were small:
Eurocamp Domaine des Ormes in Normandy/Brittany borders. Loads to do on site for all ages - about 5 pools, indoor and out, with waves, slides, lazy rivers. Pony rides and proper horse riding lessons, archery, a mini climbing wall and zip wire, pedalos, pizzeria, market etc. You can stay in tree houses or caravans or chalets. Mont St Michel is nearby for an excursion.
Romney Sands - not upmarket but great fun. There's miles of sandy beaches, a mini steam railway that passes through the camp, a fairground at Dymchurch (accessed by the miniature railway) and a lighthouse at the other end of the train ride. Also at Dymchurch brilliant 1950s style ice cream parlours, donkey rides etc. On site there's playgrounds, a swimming pool, a lake to explore with weird WW2 sonar radars left from attempts to spy on Germans coming in, so a bit of interesting history if they like that sort of thing. Derek Jarman's house and garden if you want an arty outing.
Disneyland Paris - DC loved it aged around 5 &6!