Where to stay depends on how close you want to be to the boardwalk. If you want to be close, you're probably going to want to stay no further down than Wildwood Crest.
Good is kind of a relative term for hotels/motels out there. They range from the kitzchy (how do you spell that?) to the moderate. Water's Edge is pretty nice, it's in Wildwood Crest and they recently added a wing there a year and a half ago. Most of the rooms (with the exception of the added wing) are waterfront. We usually stay there for the annual NJ firefighter's convention in September.
Seafood restaurants are plenty there, but we try to stay away from Urie's. Bad experience, and sub-par food. We prefer The Crabhouse at Two Mile Landing. It's always busy there, and the food and atmosphere are great.
Wildwood is a great place to vacation. I wish we were going down there this year, but it's not going to happen. Hopefully next year.