Was there about 8 years ago. I'm pretty sure that guest houses/B&Bs are the only accommodation available - from speaking to other people they all seem to be well run and friendly. Maybe check with Bord Failte?
It's a lovely place especially if the weather is good.
To be near a few shops/restaurants I would say it's essential to book somewhere in or close to Kilronan.
Not a lot for kids to do on the island if they are bored easily.