It's not a bad part of town, you are a few blocks from the water and Fort Mason which has a large park. A good Sunday brunch spot in Fort Mason is Greens which is a vegetarian restaurant that even this meat eater likes. It can be hard to get into though.

You should also be able to walk to Fisherman's warf pretty easily (hop on the 42 bus to take you there if you prefer).

A block away running parallel is Polk street which has lots of bars and restaurants (there's also some on Van Ness, but not as much)

Heading west down lumbard is a very busy street in the Marina with quite a bit to do. This is a main street for cars heading to the Golden Gate Bridge and has lots of hotels and restaurants.

heading east on lumbard will take you past the crookedest street and will eventually take you to North Beach with lots italian restaurants (Rose Pistola is my favorite in that area). I'm not sure about the hills heading that direction though.

Going the other direction, down a few blocks and west is Union Street which has a bunch of shopping and restaurants (including Betelnut, one of my favorites).

Basically the area is safe with a pretty good mixture of hotels and apartments. There is quite a bit to do within walking distance.

Hope your friends have fun!