Villa Michalis is an outstanding place to stay in Crete for families. We had a two bedroom unit, both of which are upstairs.
The units are pretty small but you have large terraces on both floors which add to the usable. Our unit was very nice with a new kitchen.
The location is perfect for a family that wants access to a nice, not crowded pool, and also is very close to a number of beaches.
Village of Istron has most amenities you need within walking distance and there are a couple larger grocery stores in Agios for stocking up.