C.J.
I love Chateau and highly recommend it for families! (I actually got married there about 10 years ago). we stay there one or two nights every summer and meet family out on the lake.
It is so fun, has a great play pool, tennis courts, near the dam, fish hatchery and the nature center trails little ice cream parlor, etc.
I grew up in B-town and I am not familiar with Deer Run, but sounds like a winner, too, if you don't want to go out into the city, but just want to stick to lake, SDC and white water water park isn't too far from their either.
They also have a TON of timeshare/condos available my SIL works at Stormy Point as an activities director and they have daily crafts and activities for families as well as a great pool.
Have fun!!
Addition: Saw Gina M. response. The name of the place with the water park in it is "Grand County Inn" or "Splash Country" They just started a FB page with daily deals, so if you are interested, follow them and save some $$:)