Sorry it has taken me so long to answer this thread...busy days... anyway
My favorite branded hotel is the Radisson Oceanfront:
http://www.radisson.com/hoteldirect...ctory&backURI=/reservation/hotelPreference.do
This hotel is not actually in Melbourne Beach which is south of this. The hotel borders Indian Harbour Beach and Indialantic.
There are plenty of restaurants and shops along A1A, mostly they are mom and pop and that is why you are not seeing them.
Every time I go walking on the beach there are tons of shells.

The beaches are really nice.
December in Florida can range anywhere from the 80s to the 40s. It just depends. Usually the water is still pretty warm, but I do not go in the ocean much, so I am not so sure on this.
cdntowdw, I stayed in a smaller hotel in Melbourne Beach once, I can't remember the name right now, I have the paperwork at home, so I will post it either later today or tomorrow. As I recall it also had a website. The rooms were nice, had kitchenettes and were reasonably priced (we stayed for free thanks to a friend, but I had checked out the rates).