We will be in SP in August as we were last year, our two children are 4 and 6 so I see your concerns, but don't worry you will be fine. the resort will have baked nicely by then!
As long as you steer clear of The Deya and Sun Beach, you should be fine.
Up by the square are Punta del Mar, Jardin del Sol, Royal Jardin and Verdemar (Britchicks place), I cant comment about them really but never see any herberts!
on the other side of the bay Bahia del Sol, Playas de Rey have good reports.
In terms of restaurants, we never found them to be mobbed but if you are going to Fat Sams, get therte early (7.30 is) otherwise there is a queue.
The square was busy but not that you couldnt sit comfortabaly.
Hope that helps, if you need any more info, just ask mate.