I would definitely recommend the Iberostar Creta Mare or Panorama, just outside Rethymnon- the facilities are excellent and kids clubs are brilliant. Safe bathing and great for grown ups too !!!

Take a trip on the great looking replica pirate ship from Rethymnon old port - our kids loved it

I would recommend the Louis Creta Princess in Maleme. As with a lot of AI's it is a bit isolated, but the pools are brilliant, the food excellent and the animation team work their socks off.

Rooms are small but you are not in them much. Also you fly into Chania (good for a day out) and then it is only a 30min transfer to the hotel.
Nearest village/town is Platanais which is also good for a day or evening out.

try the hotelPetra Mare in Lerapetra, own waterslides, great kids club and right on the beach, AI as well , read my review on this site