I would highly recommend the Marina club in Lagos in the Algarve. We've gone for the past 3 years. last year our daughter was only 9 months at the time and we had a great time, we're going back next week and she's not 16 months so looking forward to it again.
The marina club is exceptionally clean, nice stroll to the beach and 10 minute walk along the promenade into town or restaurants on the marina too. Lagos itself is lovely, very relaxed and no mad night-life.
check it out on tripadvisor. Sunworld do packages to it and check out marinaclub.com.pt. Plenty of great places to explore then by car. head inland to find some beautiful mountain town and villages