Well, Phillips is the place where most of the locals eat. The place is in the middle of town about 2 blocks off the boardwalk. Its got a history . Its got a huge menu of all kinds of stuff and its family friendly. ANother (and a little better place) is Harpoon Hannahs in Fenwick Island, Just North of OC and across the Delaware Line. Harpoon Hannahs gives these "Amuse buche" thingies like coconut muffins and little pre meal treats.
Phillips is huge and has a complete service and, as you desire, they can whip up spaghetti or a burger for the kids. But their seafood menu is failry wide. You only gonna be ther 1 night? are you going to travel around the Delmarva Peninsula?