The Delta Prince is walking distance to all of the main sights in Charlottetown including Peake's Wharf, Province House, Founders' Hall, the shopping strip on Queen Street, Victoria Row (pedestrian street), and Confederation Centre for the Arts.
But the "real" PEI is so much more beyond Charlottetown. And it is a good idea to have a car rental for the week. When you arrive at the airport, be sure to pick up a highway map. This map will outline several different scenic coastal drives such as "Green Gables Shore", which might be of interest to your kids. My personal favourite is the "Points East Coastal Drive". During the drives, you can stop off at any of the beaches (some are red sands; some are white sands).
I stayed at the Delta Prince a few years ago. It was your standard Delta hotel. Nothing special but nothing wrong. The only thing is the Delta doesn't offer complimentary breakfast whereas some of the other nearby hotels do. However, like I said, the Delta is close to many things including restaurants. If you are planning to go to the beach, I recommend you find out from the Delta if they offer beach towels to their guests. Otherwise you will have to either bring your own or buy.
And no trip to PEI is complete without a lobster dinner. There are two popular lobster suppers: St. Ann's and New Glasgow. I liked New Glasgow: All you can eat appetizers and desserts, with your choice of size of lobster ranging from 1 lb to 4 lbs! (Special price for kids). Within Charlottetown, I recommend the Water Prince Restaurant.
Enjoy!