Driving south, after you go through Lewes, make sure you stick to the speed limit. The DE beach towns live off of speeding and parking tix. Dewey is infamous so watch out.

Just south of Dewey and before Bethany there is Matt's Fish Camp on the ocean side and a bit farther on the bay side is Blue Coast. Both good but no reservations so get there early or get ready for a wait; you can always have a drink and chill while you wait.

North of Dewey, you can stay on commercial 1 where the outlets are or head into downtown Rehoboth where there are more options. In Rehoboth try JAM Bistro or Eden Cafe. Friends also recommend Cultured Pearl and Back Porch. Beach prices and def not city 5* dining but all pretty darn good for the shore.

Def avoid the Dewey food/drink madhouse but enjoy the beach there.