We go to Sharm often. The shore is lined with a band of dead coral, so take shoes to go into the sea with, otherwise the walk out is difficult and really uncomfortable. However, once you're across the coral if you have masks and snorkels it's like swimming in a giant technicolour aquarium - and some of the fish are enormous! Absolutely amazing. In Sharm you see almost as much snorkling as you do if you're scuba diving.
The restaurants are good, it's safe to walk around, even late at night, it's friendly and it's very, very hot, so hats are a good idea - and it's a good idea to keep a T-shirt on the little one too.
Also, this might sound odd, but be sure to take some toilet paper in your hand luggage. The lady in the loo at Sharm airport hands you one square as you go in - and they don't put any more in the cubicles!
Have a wonderful time!