Loch Sport and Dwerja is a great place for for young kids. We have 4 under 8 years old and they loved the kangaroos that were seen at morning and night. The house is very pleasant with 2 living areas (or even 3) and 2 bathrooms. You are right opposite the boat ramp and pier so there is always something going on to occupy the children without it being too busy.
With a BBQ, well appointed kitchen and 10 beds in 4 bedrooms it provided us with the flexibility we needed. The only thing to be mindful of is that the fridge is only a medium size and cannot take all the food and drinks a large family may need. We had a camping so were OK, otherwise an esky for drinks may be worth bringing.
Because it is at the end of a 25km dead end road, the town has a very good feel about it, people are very mindful of children so they drive slowly and look out for others near the water etc. It reminded me of my family holidays as a child 35 years ago. mehr