Terry is somewhat right there, but there are still some picks in the area that are great, and for different reasons too.
"Crowded house" in Ferguson is very popular because the food tastes and looks great, not to mention the owners are the kids from Hobsons Bay fish n chip shop across the road. They've been local their whole life! Mostly a younger crowd too.
"Provisions" in Ferguson Street too is amazing as well. Very different though. Think Deli style with hearty food and standard, but decent coffee. Family crowd here and they are very accommodating.
Like Provisions, "Odd Spot" on Melbourne road is somewhat the same, but away from the grind. THey have rebranded themsleves recently and are more modern and seem to pride themselves on being healthy style food with a clean, but warming atmosphere. young professionals and young families come here, with some more mature families as well.
"Pint of Milk" on Douglas Pde is one of the newer places, (technically Newport, but very close) and serves modern style breakfast and amazing coffee. This is away form the hustle and bustle of the busy areas of Williamstown. So don't discount it. Mainly younger and young professional couples go here.
If you're in the area of those last two, I would consider visiting "Nosh" , which is next to Newport Train Station. It's very different to all the others. It's got a urban feel with it's old Op shop style furniture and rustic food style. Similar to something you would find in Fitzroy, rather than Newport. You will still find your favourites on the menu though.
I would avoid Nelsons Place, Rents are expensive for business owners, which makes for expensive meals, and lower quality produce. Though if you are after the scenery and history of the area, rather than the food, then walk along have have a look along the strip. There are some nice looking places. Tic Tok, Hobsons Choice and there are a couple other good for that. :)