Hi Marci!
If you are planning on leaving the park right at 7pm, I'd suggest making your reservation at about 7:45. This should give you plenty of time to exit leisurely and catch the boat over the the Yacht & Beach Club or to the Boardwalk area. However, if you're planning on catching Fantasmic at 7pm, I'd make it a bit later - perhaps 8:15 or 8:30.
Personally, I think there are a number of good restaurants in this area. If you're a seafood lover, you may want to check out the
Cape May Cafe at the Beach Club. This is a buffet, so its often easier for little ones - less waiting before your food! Another great option is the
Yachtsman Steakhouse at the Yacht Club - if a great steak is more your style. And last, but not least, for an incredible signature dinner,
Flying Fish Cafe at the Boardwalk is wonderful. AND, the Flying Fish is much more than just fish! They feature steaks as well as seafood and I've even found great vegetarian options there.
Hope this gives you a few ideas!