Hi David
I only really have experience of Torviscus/Fanabe area in Tenerife, (although we have just bought an apartment in Los Cristianos).
Obviously these are the 2 busiest resorts, both I would say are good for family orientated bars. (Just make sure you stay clear of Veronicas/Patch/Starco in PDLA).
You are spot on when you mention 'passing trade' -I have 3 newsagent businesses in the UK & know from experience (thankfully not mine), if you are in the wrong spot you will not get the custom.
Even the slightest things like some steps or just around the corner from the main drag can make a huge amount of difference. (I know for example if I leave my shop front door open so many more people will come in than if it was closed, may sound silly buts it's a fact).
The rent will be more expensive in the busy areas, but you will find you will be able to charge more. As long as the quality is there, people will return.
If I can be any more help please let me know.