We actually just got back from our second trip to the dolphin discovery at Chankannaab. My DD and I missed the port because she was sick the night before and we didn't want to risk taking her off the ship. My DS, DM, and DH went as planned.
DD, not yet 2, was actually booked (for free, directly with Dolphin Discovery) . Children under 5 can definitely do the Dolphin Encounter where you stand on the grate with an adult and pet and kiss dolphins. We saw kids do it the previous trip, and we were booked for it this trip. We only missed it because DD and I stayed on the ship to be safe with her health.
We booked directly with dolphin discovery, just said we were staying at a hotel. We booked both the dolphin encounter and the sea lion encounter for the same price as booking just the dolphin encounter through
DCL. DS absolutely loved both, and also spent a lot of time in the sort of shallow tide pool area wading and watching fish, crabs, and sea urchins. He was so enthralled that they almost missed the boat.
As far as money goes, we paid in advance, and I'm sure they wouldn't have given us our money back. They didn't have a problem subbing out who was doing what, though. We'd paid for me, DH, and DS to do the dolphins and me, DM, and DS to do the sea lions, but since I wasn't there, they just let DM, DH, and DS do both.
I don't know what kind of cameras they will allow you to take in the water. We just decided to buy their overpriced packages both times. Their photos really did come out great, and we decided it was close enough to a once in a lifetime thing to just go ahead and get them. I know the family next to us last time was able to bring theirs, but I know I've talked to people who weren't allowed to bring theirs. I know that isn't any help. I know you have to have a waterproof camera, but I don't know why they permit some and deny others.