Di and welcome to the forum.
We love Forster. Like anywhere on the north coast at that time of the year it's going to get really crazy busy.
We stayed at the Lakeside Resort during Easter '11 & it was really lovely. We had a waterfront site which was pretty quite and the kids(16 & 14) could wade out quite a long way in the lake before it got over their thighs, so it would be great for little kids. Also had a lot of kids at this park and they were all well behaved. It is a little way out of town which is what we prefer and the amenities are all new. The only downside was that they needed more amenities during the busy season, but we were in no rush so it didn't really bother us that much. We had friends from Forster (as we used to live there) come out and have a bbq dinner with us and they also loved it.http://www.lakesideresortforster.com.au/caravans_camping.htm
You could also try Booti Booti, Pacific Palms, Redhead Beach, Blueys Beach, they are all around Forster/Tuncurry. Friends of ours stayed at Booti Booti and enjoyed it but it was also really busy in school holidays. Maybe also try Tea Gardens & Nelson's Bay. Anywhere on Wallis Lake (Forster) will have no waves and be good for the little kids.
Hope this helps a little. If I think of any others I will re-post
Look forward to reading a report on where you decide to go.