This is like a walk down memory lane; my family always went to York Beach for the summers, and now my brother and sister both live in York (with their families, of course!). My mom worked at the Ogunquit Lobster Pound and Goldenrod, my sis and I worked at the G-rod, my niece will be at Brown's this summer, my BIL worked for years at The Oarweed in Ogunquit, and my brother bakes at several of the bakeries in the area in the summers!
Let's see... Warren's has an amazing salad bar but their fried seafood is lackluster. Weathervane and Bob's Clam Hut in Kittery both have great fried seafood (Weathervane has my favorite fried clams, Bob's has- get this- great tartar sauce!), but we tend to go to Newick's out on Dover Point as they have the biggest servings and best non-fried seafood- and darned good fried seafood. I adore clam chowder and the BEST I have ever had is at the Maine Diner in Saco. Just perfection! ANd, yes, The Library is just as toney, expensive, and GOOD as ever!
Ruby's in York is a little place (near Hannaford) that serves decent beers and everyday food- pasta, pizza, burgers, sandwiches, etc. I think they have main courses, too. Go early (4-6, I think?) and appetizers are half-price. We often take the kids and make dinner out of nachos or something like that, and it's so affordable. Food's also good. Green Leaves has GREAT Chinese food. I always hesitate to try Chinese at places I'm not familiar with, but this place has a good selection, well-prepared food, and a decent dining room. Ceres Bakery in Portsmouth is a good choice for breakfast foods (not hot cooked, more bakery/granola/coffee breakfast). Brown's for ice cream (out at the Nubble) is the best, although Annie's in North Berwick (i think it's north, might be south) has terrific ice cream but a tad out of the way. Portsmouth Brewery has great beer and food, and you can buy growlers of beer to go! Omelette Factory in Ogunquit is a GREAT place for breakfast! There's a Wild Willy's in York on Rt. 1 and also one in Portland, just off 295 exit 3, if you are in the mood for burgers and an atmosphere that redefines "casual!" Also try Chauncey Creek for lobster; this place is as close to the old-time clam (lobster) bake as I can find! On Rt. 1 between York and Kittery, When Pigs Fly has opened a new retail store and they have a pizzaria with the BEST wood-fired pizza ever! York Harbor Inn had a decent dining room for a nice dinner out, as does The Dockside Inn. Sometimes in these small, seasonal restaurants, you'll find the chef changes from year to year, but these two are pretty consistent as far as quality goes.
To do... Go walk on Long Sands beach, or hit downtown York Beach for an "old fashioned" New England seacoast town. Yes, it's touristy, but that's part of the fun. Browse affordable shops, buy kisses at the Goldenrod, walk on Short Sands Beach. In "Olde Yorke" there are historic houses, school house, and jail (Gaol) that you can tour, and in the summer they have a haunted walking tour. Portsmouth used to have horse drawn carriages available for rent- not sure they still do, it's been a few years. DH and I took one once; it was fun, and I saw and learned new things about Portsmouth. Can't vouch for Strawberry Banke site/tour as I haven't been since the '70's but I've heard that it's good. Check out Prescott Park; they have live outdoor theater all summer long. (last year my niece was in about a zillion shows of Wizard of Oz!). If traditional theater is more your cup of tea, check out the Ogunquit Playhouse online to see what's being offered this summer.