August is a great time to be in the area because much of the traffic is gone. Our family LOVES to go to the Big Kahuna in August when there are no crowds. It's expensive (it was about $25/person) but if there are no crowds, it's worth it. I spent most of the morning going around and around the lazy river in a tube. It was good to go in the morning because it was even less crowded and we stopped at the donut place next door for breakfast first and then went to the Front Porch (or is it the Back Porch) for a great lunch afterwards. Then, if you wanted, you could go back to Kahuna's (we didn't).
There's supposed to be a new water park in Panama City opening up but I don't know when. I'd definitely try that with a family in August.