Lake Powell is a top spot for houseboating. Often, extended families or a group of friends get together on a large-model houseboat complete with mulltiple bedrooms, lounge area, big-screen tv, dining area, well-equipped kitchen (probably with two fridges), and a top deck with sunny and shady seats.
Generally, houseboats have a slide at the back of the boat, which kids love, of course. You can also try kayaking and other watersports; gear is available for rent, as are power-boats. Lake Powell has beautiful Houseboaters can also dock the boat and go play on the shore, or even take a hike in some areas.
Houseboats --of amazing luxury, if that's your taste and budget -- can be rented from Antelope Point Marina, which has a store, restaurant and hotel (soon).