Anniek, I tried to post this before but it did not seem to work - technology eh! I think this may be because I included a link to a hotel and that was read as spam.
Cabo Roig is mainly an ex-pat area so is residential without many hotels (although some people have bought properties to rent out). There are some apart-hotels on the Cabo Roig strip (which is on the busy N332), but I have heard mixed reports about them.
By far the best hotel in the area is the Hotel La Zenia, which is one round-about down from Cabo Roig, towards Torrevieja, and is on the sea-front. (Type into Google as the site will not let me give you an email address).
Most of the restaurants are on the N332 main road, although there are some elsewhere. Some are okay value against the UK but expensive for Spain, but others (particularly Italian) charge high prices than I would expect in London and for average food. You are best looking off the main road for better value restaurants.
Remember that this is a residential area so you will not find anything like the night-life of Benidorm, but if you want a relaxing time in the sun than it is great (I really like the area).
There is a very infrequent bus service into Torrevieja (about 10-15km away and the nearest main town), but cabs are cheap and have meters.