Hi, I live in Marathon (27 years) and these are my suggestions.
Franks Grill (need reservations) is by far the best dining. Italian influence. Great fet. alfreado, ravioli and I always get the lamb chops...But the chicken franciase is great and so is his fish.
After that The Butterfly Cafe is very good. More upscale but I've had only raves about the food.
Baraccuda is one where the chef is certainly talented but the prices are high and quality consistency is certainly below Franks and BC. Tourists seem to really like this restaurant, locals are more ambivelent, although I will say that many years ago I had the absolute best cowboy steak ever at this place.
Fish Tales is very good for lunch as is Herbies (very Keysey).
There is also the Hideaway Cafe on Grassy Key, which is a great atmosphere and I've never had bad food here but again it's been a little inconsistant.
Not to be disagreeable but I disagree about Keys Fisheries...It's a tourist joint with expensive fried fish that always makes me needing to be near the facilities, if you catch my drift.
My favorite Keys restaurant (North of KW) is Ziggie and Maddogs in Islamorada. I have found it to be absolutely superb although in deference to my upper Keys chowhounds they have somewhat less lofty opinions than myself.
One of my absolute favorites is Keys Fisheries. Great Lobster Rueben and The Best Conch Fritters. Casual place - you order and then they have a different theme each day - so, instead of giving your name you give a movie title or a cartoon character which is then used when your order is ready. The theme for the day is listed on the specials board.
Not for the food aspect.But for the cheap fun.......On your way down to Marathon stop at Robbies at Mile Marker 77..It will be on your right after you go over a bridge. The breakfast is very good there at the Hungry Tarpon., but the real treat is feeding the giant Tarpon there. It's cheap, it's fun