I grew up visiting Sanibel, and continue to go with my kids yearly. As for places to stay, the only place we have stayed other than my grandparent's home, was the Casa ybel resort. They are nice condos on the beach.
Sorry I'm not much help there.
As for food, I don't think Sanibel has great choices, personally. THE best fish and chips's I've ever had though are from Schnapper's Hots. It's a great little "shack" off of Periwinkle Dr. It's a must if you like Fish and Chips-if it's in season, the Grouper is amazing. The fries are great too. Just be forewarned, there's not much room to ea there, a few bar stools, so usually you will be eating outside- in the heat!
http://www.schnappershotssanibel.com/
If you want something fun, we always visit the Bubble Room in Captiva. The food is pretty good, the desserts are fantastic, but the atmosphere is what wins for us. It's an old antique shop that's filled to the brim with crazy stuff. Check it out:
http://www.bubbleroomrestaurant.com/frameset.html
For a nice(pricey) place, The Green Flash on Captiva is wonderful. It's waterfront, and very nice.
For breakfast, we like Amy's. It's on Perwinkle as well on Sanibel.
http://www.overeasycafesanibel.com/
Have a great time-we love Sanibel!