Fun Family dining in Sandestin
There are tons of restaurants "in" Sandestin on the Bay side, most are probably going to be very crowded with other tourists and not the BEST places around, but not bad either. A few other restaurants near the area are: the 3-thirty-one club (heading out of SanDestin head towards Destin, turn left on highway 331) it's great food, small menu, and is cash only, just fyi. http://www.the3thirty1.com/
Another good place that's been around forever is Harbor Docks which has seafood as well as sushi and we've always had great experiences there. It's very casual and towards Destin but not too far and is also family friendly.
There are tons of places along the coast in the Destin direction, all of which are family friendly. The Donut Hold is a Destin landmark serving breakfast/lunch/dinner -- great breakfasts and grilled cheeses. The original is IN Destin but there is a second location near highway 331 towards Seaside.
A great fish market near sandestin is Skipper's -- definitely get the tuna dip. They are located on the back side of the Bruno's grocery store strip mall. If you want an adult dinner, Beachwalk Cafe is always terrific http://www.beachwalkcafe.com/ and is also located in Destin.
If you have any other specific requests I'll check back, but hope this helps some. Have fun!