DH & I stayed here on Mull last year when I was 5 months pregnant but it would be perfect for families. It's at Craignure, near the ferry terminal (from Oban) and if your kids are pressurising you into going to Balamory (Tobermory) then this could be the cheap accommodation option.
Basic but great fun and able to move around freely with the luxury of a calor gas heater. It was Easter when we went and luckily the weather was fab - 70F during day, however at night temp dropped a lot as it was still early in season, hence gas heater was a godsend. Apart from Balamory, there are castles, bird of prey centre, miniture railway, gorgeous scenery and the freedom to let kids play.
For those thinking of buying a tent but wondering how it would go, then this would be a good test as it is a sort of half way house.