Since you're taking kids, my vote would be either North Wildwood or Ocean City, NJ.
North Wildwood is a little quieter and a little less trashy than Wildwood, but you can still easily get to the boardwalk and all of the stores in Wildwood and Rio Grande. (my grandmother has lived in North Wildwood my whole life, so I'm a bit biased
)
Ocean City for all of the reasons above (still being dry/having a boardwalk).