We were going to head to the Gold Coast for a bit of a break. It ticks your shopping criteria and we were going to stay at Paradise Resort as it looks amazing for kids and not too expensive. The Gold Coast isn't everyones cup of tea though and might be best to save that for when your kids are older and do the theme parks etc. If you are still keen on an island, Tangaloma (sp?) on Morten Island is good, bit expensive though, they have dolphins you can feed!