L.V.
We've stayed at the Cliff's Resort in Shell Beach/Avila Beach several times with our young girls and it is gorgeous! The hotel is situated right on the water with walking paths down to the sand and features a great pool area for kids and adults. When we've stayed we have booked an ocean view suite and they are huge (they even have jacuzzi tubs). Plus, you can leave the patio doors open at night and listen to the waves! It was shockingly affordable from their website, so I'd check it out.