Big Island is BIG and there's lots to do!
We recently came back from a wonderful 10-day trip to the Big Island. Traveling with young kids ( 5 yrs girl & 8 mo boy) was actually not as difficult as we thought but we sure had to skip many of the active outdoor activities. The HGVC Waikoloa was great - beautiful resort w/ small pool (great for little kids) & jacuzzi, nice & clean furnishings but the 2nd bedroom was really small with limited storage space (huge master bdr/bath although no jets in the bath tub). We stayed in building 15, had a nice view of the golf course and the lanai was great! Waikoloa is quite a way from Kona so this mega resort area is nice but somewhat superficial as it is geared toward tourists only. That's okay since we were on vacation with little kids so spent 2 full days at the huge Hilton Waikoloa Village resort. We really enjoyed our time there. Since airfare was so expensive flying out Sat-Sat, I booked 3 more days at the WorldMark Kona to spend more time around Kona and saving $500 on airfare. The WorldMark Kona was a big disappointment, especially coming from the HGVC! Although the Worldmark 2 bdr was more spacious, it felt like we were staying in a motel w/ no central AC (each rooms had its own AC but the remote was missing so the room was either set at 70 or we had to turn it off) and our towels were old and had stains on them. The only good thing there was the friendly service and central location.
We did our grocery shopping at the Waikoloa Village (6 miles away fr the Hilton) and ate at KauKau Depot (good food and cheap, where the locals hang out). Prices at the Waikoloa Village was cheaper than the ABCstore in the Queens' MarketPlace but for the best prices, go to KTA superstores (buy your food souvenirs - best selections & prices) , Costco, Target or Wallmart. Buy your fruits at the farmer markets if possible. I miss the sweet papayas, pineapples, bananas! When you're in Kona, make sure to stop by the Big Island Grill, a local favorite - huge portions & tasty too!
We spent most of our days at the beach as the kids can play in the tide pools for hours! Best kids beaches Kahalu'u Beach (also known as Turtle Beach - great place for kids tide pools & snorkeling), Beach 69/Puako beach (cool trees for the shade), Hapuna Beach (beautiful white sand beaches), and Two-steps - great snorkeling.
We did 2 long days of sightseeing - beautiful island but very long drive, especially with 2 kids! Must see & hike the Pololu Valley lookout! Stop in Hawi for delicious & cheap kona coffee, coconut, & mango ice cream at Tropical Dreams. Waimea has a fun playground if you have little kids. By the time we finally got to Akaka Falls, it was raining and dark so we didn't really get to enjoy the area as much. Had dinner at Cafe 100 in Hilo - lots of locals but nothing great - tried their loco moco (rice w/ lots of brown gravy, fried egg & spam or burger) - different. We also took the south route to the volcano and stopped in Ka Lae, the southmost point in the US, and Panaluu' for the best sweet bread, before reaching the volcano. My daughter was disappointed since we couldn't actually see the flowing lava. We hiked the lava tube but it feels like a tropical rain forest.
Overall, we had a great family vacation and can't wait to visit the Big Island again, and thanks all who gave us suggestions!
. Since I'm not a local I don't really know. I think they go to most of the restaurants that the tourists go to. I'm also not sure what you mean by "true Hawaiian food". 
