Best dishes in Colonia, Uruguay? Any level of resto is fine.
I've lived in Buenos Aires for 7 years now, and I have a friend who has a house in Colonia that she visits on weekends, so I've spend a good deal of time there. I haven't yet found a restaurant I would rate better than adequate.
Friends visiting from the northern hemisphere often think they want to spend a couple days in Colonia, but they're always ready to return to BsAs much sooner than they had planned. With so much to see and do in and around Buenos Aires, I've reached the point that I recommend against going there or at least staying overnight. Colonia is charming, but a half day covers the colonial center, which is only about 10 blocks, at which point you may feel stuck in a provincial Uruguayan town with nothing to do.
If you just want to relax, perhaps at one of the spa hotels (Unique ex-Kempinski, Sheraton, or the Four Seasons 50 miles north in Carmelo), that's a different trip. But as a tourist destination, Colonia doesn't offer a lot.
If you do go, here are two eating recommendations. Try the Rabas (fried squid) in any bar or cafe. For some reason they always come out better in Uruguay than in Argentina. For a restaurant, La Bodeguita on Calle Comercio serves interesting pizzas on a porch overlooking the river and the lights of Buenos Aires. And be aware that the bottled water has a foul, sulfurous taste, and the local wines are mediocre at best.