I have heard that the Frenchtown Hotel has opened up again and is pretty good. If you are heading to Milford, Ship Inn would be the better choice, revamped menu with a focus on local ingredients and good homemade British beers.
Personally would drive to Milford, and go to the Oyster House. A little farther south the Seargentsville Inn is a great destination. Ive never had anything but light breakfast and lunches in Frenchtown.