What are the best things to do in Port Douglas?

a) have a cocktail and some finger food in the lounge at Zinc;
b) walk on the 4 mile beach early in the morning or late afternoon/early evening;
c) enjoy the fabulous food (Salsa, Sassi's, Bistro 3, Nautilus, Zinc, Finz, Harrisons and many more)
d) the Sunday market is fun for a wander and to buy fruit, enjoy a massage or buy some gifts;
e) the Day spas are excellent.
f) All the tourist things - visit the reef and rainforest - check out the day trips.
g) Sitting at the workers club and watching the boats return at dusk - enjoy the sunset;
h) Sleeping when you feel like it and for as long as you like...
i) Reading for pleasure
It really depends if it's your first or 10th visit - we don't do much sightseeing after visiting for many years, but
really enjoy our time in Port. I can't achieve the same level of relaxation in Melbourne...you can feel the release as soon as you step off the plane - I love that easy pace.
We also enjoy driving out and having lunch at the Silky Oaks Resort - sitting up high overlooking the river...the drive is great past cane fields and gorgeous rainforest scenery.

Just noticed you mentioned kids - swimming, tennis, walking/jogging/playing on the beach, hiking in the rainforest, Breakfast with the Birds, the crocodile and wildlife park (on the road between Cairns and Port) - I'd call in at the Visitors Centre and get some brochures.
Also, if you're staying at one of the larger family resorts, they might have kids clubs and other activities.
Enjoy - Port has something for everyone!