VillaEphrussi
Id say so yes, in fact I would say the younger the better, don't go there expecting a theme park of the standard of the UK ones, it is free after all.
The water park is lovely, I took 2 piece wetsuits for the DCs (£10 on ebay) as my youngest is tiny and really feels the cold, the older mostly just wore swimsuits. We went there 3 times in the course of a week.
There is a big play area that is open in the evenings, and a mini disco once or twice a week, but there isnt a lot to do in the night unless you want to pay hugely over inflated beer prices, that said we never went into the town in the evenings, so I dont know what it is like there.
There are loads of small rides for the DCs, mine happily spent all day there 4/5 days out of 7.
There is a small farm park close by and a huge beach, we also went into Amsterdam for the day, but I wouldnt bother going back to Amsterdam with small children, it was absolutely rammed and my friend who lives there all the time says its constantly like that.
I think Duinrell is really good value for money tbh, especially if you pay with Tescos vouchers like we did, pizzas from the take away are nice as well.