Let's get real! I have been to Key West many times over the past 20 years from the time that my kids were small. Unless you lock your children in a soundproof, windowless room with no interent, email, cell phone, etc, you are not going to expose them to something new (and most of your kids' information will come from their friends, no matter how moral you may think that their school or friends are). From my experience, the more you try to hide or deny something, then the more 'interesting' it will become for kids. There are LOTS of families at Key West on any given day (and no-one ever had a blindfold on their kids from my experience). One of the highlights is going to the pier at sunset and watching the jugglers, magicians, acrobats, etc. Some of these acts have been there longer than we have been going to Key West and there are many many families with their kids who go and watch this every night (including ourselves).
Today Key West is tame by what is was like 20+ years ago. If you walk Duval street after dark you may see same-sex couples (who can now legally marry in many states as well as Canada etc) holding hands etc BUT you will see this in New York City and every other citys as well; more impressionable will be the bars with live music and people walking down the street with drinks in their hands (but are your kids going to be in bars at 11 pm?). In the daytime Key West is full of tourists with the usual touristy things - no different than anywhere else. I should note that my kids also went to New Orleans when they were small. What impressed them was a group of rubbies sitting/sleeping on the sidewalk - my kids were oblivious to everything else (and even with the rubbies my kids looked at them, made a face, and then walked past without further comment).