I've stayed at a few places in Raro in the last few years.

Cost-wise my favourite was probably a beachfront room at the Rarotogan Beach resort. Nicest overall though was the Pacific Resort.

If you've got a bit of time (say a week) spend a few days at Aitutaki as it's beautiful. Pacific Resort also has a resort there that's worth staying at and you can get packages to stay at both.

On Rarotonga if you're worried about the food (or think you'll get bored with eating at the same place) rent a car or scooter for a day or two. It only takes 30mins to drive around the island and the speed limit is 20kph so it's pretty easy. You just need to pay for a licensce (and do a short test) at the police station in Avarua first. Outside of the resorts there's plenty of restaurants; being on an island most sell seafood but there are some quite good ones. Prices are expensive though as meat has to be imported.

I remember a good italian place on the north-east side of the island near Avarua that would be worth tracking down.