We have been to Playa de Muro 4 times in the last 8 years and only noticed the mozzies last year , however a liberal supply of repelent before we went out in the evening sorted it.
We have previously stayed in the Eden Alcudia and Las Gaviotas appartments , both of which we liked .
The Cheers bar is pretty good for childrens entertainment from around 9pm , although we did hear they were trying to sell it at the end of last years season .
The Swan , right by the beach , also does some half decent entertainment in the evening and most hotels will also run their own stuff .
As for eating out it depends what you are after , plenty of English (everything with chips) type food . There is a nice Tex Mex place a short taxi ride or aout a 25 min walk up the road towards Can Picafort (it also has a play area for young children , if you have any)
However the best palce I have eaten there is Neuvo Rancho , it is a few doors away from The Eden Alcudia hotel and is well worth a visit .
Hope this helps , but please feel free to message me if you have any more questions.