Nice sleepy Mexican coastal town on the sea of Cortez. It's quiet except for the weekend when people come in with ATVs and Jetskis and then it becomes crowded and noisy. The south beach is very nice for small kids as the waves aren't very big there is no drop off. Lots of shells to find and explore safely.
I loved this city when I went earlier this year. My boyfriend and I stayed at a hotel a bit away from the downtown area called Hotel San Felipe Marina Resort. It was wonderful, because it was close enough to the restaurants and bars, but we also had peace and quiet and essentially our own private beach since it wasn't as crowded as the others. The food was delicious out there as well!
San Felipe is the oasis of Baja - right along the Sea of Cortez, it's the perfect getaway with a small-town atmosphere. Stalls filled with trinkets and handmade clothes line the usually quiet streets, while the only nightlife is in charming hole-in-the-wall bars and maybe one dance club. It's perfect for filling up on homemade tortillas, cheap beer, and a handmade souvenir before heading further south into the endless expanse of desert and coastline.
San Felipe is a located along the Sea of Cortez and makes you feel like you are somewhere tropical. Warm waters, great fresh seafood, shopping from the locals, cheap stays, good for fishing and you can rent ATV's. Small town but a lot of beach to explore.