As far as hotels go I am not certain...I know there a few places downtown that are nice...We always try to stay at the Embassy Suites. That free breakfast goes a long way.
Once place to atleast check out is the Lodo area, short for lower downtown. This is adjacent to Coors Field. A lot of it is a historic district with lots of old brick building and lots of little hole in the wall restaurants.
Regarding the kids, the Zoo is awesome. Extremely walkable and good enclosures/exibits. I say this having been the the "World Famous San Diego Zoo" on numerous occasions and like the Denver Zoo more.
My wife took the kiddo to the Aquarium too and said it was great. She actually liked it better than the Moterey Bay Aquarium, so it can't be half bad.
For day trips Garden of the Gods is pretty cool weather permiting. I think it is just over an hour south of Denver.
If you want to head north and get into the mountains try Estes Park. It is the gateway to Rocky Mountain National Park and is a walkable fun little old town....
Oh....just remembered, if your kids are older and like trains hit the train museum in Golden, it was really cool. I will try and get the specific name and post later.
Hope that is helpful.