Cozumel gets my vote! We travel there with our two teenagers (15 and 16 years old, boy and girl). They LOVE it! Very safe, town of San Miguel is great for hanging out and walking around. We never have a problem letting them walk around and they love the freedom. Also, there is a McDonald's, a Burger King, and Pizza Hut right in San Miguel and the kids love to get their "stash" and bring it with them when we go for fish tacos or cerviche in the many local restaurants. The locals are gracious about letting them bring in their junk food when they don't like what we're eating.
As far as hurricane damage, we were there in June of 2006 and the diving was GREAT, the town looks better than the first time we were there in 2005 because so much has been rebuilt and looks snappy and new. I couldn't believe how fast these people rebuilt and how lovely it was. Can't wait to get back there in April.
If you do have teenagers, try to stay somewhere within walking distance of San Miguel. Some of the all inclusives are pretty far out there. Check out Casa Mexicana. It's immaculate by American standards, perfect location, awesome breakfast included each morning right in the hotel. Large rooms, oh, and did I mention immaculate????? A big plus for the teens is that they have a Computer room off the lobby and supply guests with house computers. The kids would go down at night and email their friends or chat or whatever kids do on the internet and they were thrilled. Also included, no extra charge. We use Blue XTSea as a dive op. Last year my daughter had just been certified and Christi was wonderful about helping her and accomodating her needs as a new diver without compromising the fun for the more experienced divers in the group.
If the non divers want to explore, they can take the ferry over to Playa Del Carmen. Very cool town there with lots of authentic Bistro tyoe Mexican restaurants, beautiful beaches, and quait streets and shops to walk around in an browse. Not a cruise ship thing, very original local stuff and some fun pit stops like cool bars where you sit around on porch swings, etc.
Grand Cayman is lovely too but the town seemed like every other 12 square blocks where the cruise ships dock, could have been St. Thomas, Bermuda, Puerto Rico, they're pretty much the same.
Just got back from Grand Cayman and we didn't bring the kids but were sure they would be bored stiff.
PS- I did love Grand Cayman, especially the west end, but I was glad we did it adults only! And, everything was very very expensive...........could be taxing for a family of four or five....
Well, hope that helps. Let's face it, either way, it will be fabulous. Let us know what you decide!