Hi, DH and I went a couple of years ago, we stayed in Miami Beach at the Park Central on Ocean Drive, it was very nice, lots of eateries around and right on the beach.
Driving down the Keys we stayed at HAMPTON INN, 80001 Overseas Highway, Islamorada, 33036.(305) 664-0073Mile Marker 80 which was really nice (bit Holiday inn like). We had a large room with 2 big double beds, and I think you could get extra beds if required. Pool and right on the edge of the sea. Outback steakhouse on site was really nice too.
At Key West we stayed at THE MERMAID AND THE ALLIGATOR, 729 Truman Avenue, Key West, Florida 33040. 800 773–1894 / 305 294-1894, absolutely lovely, but probably not suitable for children. Not sure you would find loads to do in Key West for children, beach was nice and safe. Interesting graveyard with cryptic writings on gravestones was nice for a walk around. Lots of restaurants and bars, but as we went as only adults, not sure what would suit with children.
I think Duck Key, not quite as far down as Key West was maybe more geared to children.
On the drive back up the Keys we stayed at COCONUT PALM INN, 189 Harbourview Drive, Tavernier, 33070 - now this would be ideal for children, we had a suite/apartment which had cooking facilities etc, looked out over the sea, nice fenced swimming pool, barbecue facilities and you could use the canoes etc if you wanted to. Nice eateries nearby too.
Further up Florida on the Gulf Coast is Fort Myers beach, huge beach nice for children, also Siesta Key where you can dive for sand dollars - you could go direct from Miami across the Everglades to there - maybe miss off the Keys until you are just adults going?