Penang is Ok, but not a lot to do there unless you like looking at churches & temples.
Stay at Batu Ferringhi (on the north coast) not Georgetown. Georgetown is a hole. In fact lots of holes put together. Drive through it on the way from the airport, you'll see enough. I stayed at Golden Sands Resort in Batu Ferringhi,
nice enough place with a couple of nice pools, (beaches in Penang are no good most of the year due to jellyfish) no swim-up bar but the staff are pretty good at bringing the buckets of Tigers or Carlsbergs (about $4-5 a bottle).
Don't eat dinner at your hotel, everyone eats at the food court in the main street,

awesome selection of cheap local & western foods, be adventurous, it's all really good, tip big on the first night ($5-10) and you'll be looked after all week, then head to the night markets, about 1km of stalls along side the main road and buy all the crap you usually buy on asian holidays.
The butterfly farm is a good excursion if you have kids, and the tropical fruit farm for a nice walk.
We found it to be a nice place to do nothing for a while.
MP