Faro will be busy insomuch as it is a working city rather than a holiday resort, although it does have a beach near to the airport. Temperatures are likely to be in the mid 60's Fahrenheit ( 17 / 18 C)

we always are out in Feb,yes you can sunbathe particularly in the sheltered coves, as for swimming only the really hardy will venture a dip, but the covered and municipal pools will be open and well worth a try.February is the month of carnival and many parades etc will be on, which will keep the kids and you well entertained.