Seaside or Rosemary Beach aka 30a area would be my first choice but pricey. If you were counting on staying literally in Destin, I'd stay around the Henderson Park area. Henderson Beach Resort and Lofts are solid choices. The Pearl Hotel (30a area) would probably be the nicest hotel in the surrounding area. Grand Boulevard at Sandestin is a good third choice.
As for restaurants it depends on what you like. Louisiana Lagniappe, Bitterroot, Cafe Thirty-A, Vue on 30a, The Great Southern Cafe, The Gran Marlin (PCB area), Primrose, Marina Cafe. I'm sure there are more I'm forgetting.
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