Well, I live in Maine so this will likely sound like bizarre advice, but last summer we had an amazing vacation in the White Mountains of New Hampshire. We really enjoyed Story Land, a smallish water park, an old time amusement park with a bear show, lots of hikes (short one with the kids), places to explore caves (I mean really cool caves where you have to be on your hands and knees to get through). and we rented a 3 bedroom townhouse overlooking Loon Mountain which had 5 pools, 3 indoor, two outdoor, as well as 5 hot tubs, both indoor and outdoor, a place to rent video games, two arcades, bball, tennis, etc. The rental for a week was about $700. We even saw a bear on one of our hikes!
But if you decide on Maine, I second everyone's suggestions. Old Orchard Beach is great, as is Bar Harbor with Acadia National Park. There's a great movie theater in BH where you can eat pizza at table while watching the movie. Also whale watching, etc. At Acadia there is so much to do, provided you want to bike, hike, paddle, swim, etc.. You an bike (downhill) the carriage roads from Bar Harbor and then take the free bus shuttle back to your hotel or to town. LL Bean hosts the free shuttle, I believe, and their mega store/s in outlet mecca Freeport are also worth a stop. But hotels in Bar Harbor are going to be expensive.
Acadia is one of the most beautiful places in the U.S.. It is a National Park. Here is the US govt link with lots of photos:
http://www.nps.gov/acad/index.htm
also Portland is fun. You can take various scenic boat rides, whale watches, cool shops, etc. And Cape Elizabeth nearby has great beaches (with cold water of course).
Feel free to PM me if you have any specific question about destinations in Maine.
I also recommend Newport. It is where I am from and I was married there!