Waterville is a really lovely place. I am sure you will enjoy it.
It's a place that is well used to family tourism so all the restaurants will be child-friendly. That doesn't mean they will all have a children's menu, but I expect they will welcome you.
The restaurants I know of are;
The Smugglers, near the golf links, good sea food
Paddy Frogs (owned by a French man and his Irish Wife) on the way to the golf links,
The Huntsman in the village has a Value Menu of €25 (I think) before 7.30 pm.
The Skelligs Restaurant behind the Butler Arms Hotel does good sea food
The Butler Arms Hotel has a very good restaurant but it's expensive; they serve good lunch in the Fisherman's Bar which is on the main street;
The Lobster Bar does food also, I have never eaten there;
The Bayview Hotel is best avoided.
As regards things to do - well, the main attractions in Waterville are Golf and Fishing, neither of which would be of much interest to your 4-under-4.
There is a very nice beach at the golf links, but no lifeguard.
Ballinskelligs (15 mins away) has a lovely beach, as has Derrynane (25 mins away); both beaches have lifeguards in the summer.
The Aquadome is in Tralee, but that's a good drive away, well over an hour, I think.
Don't know where you are travelling from, but if you want directions from Dublin, let me know.
Hope you enjoy it, and I would be very interested to hear your views when you return.