Thank you all for the input; it was very helpful.
I took my family to Southern California last week and we spent the last two nights on Catalina Island (two days really since the last day was just a travel day).
It's expensive but it was absolutely worth it. We spent most of our time swimming, kayaking and snorkeling. It would have been nice to have one more day to explore inland but we enjoyed the time we had near the water. To someone from Illinois, at least, this place is really special. We took a helicopter there (very expensive but a great experience) and stayed at Hamilton Cove condos (also very expensive but also a spectacular place to stay). This seems to me like the perfect kind of trip to impress a special girlfriend or maybe even to propose. It looks like it would also be a good place to go with friends and enjoy the bars at night (something I unfortunately was not able to do) after a day on the water.
As for sharks, none of our activities seemed to be in water deep enough for large sharks. While kayaking the water may have been remotely deep enough but at no time did I feel any danger. We took one night boat tour, though, and as we headed to the southern coast of the island the guide told us we were heading down "shark alley." We didn't see any sharks but saw several sea lions and apparently the sea lions are what attract the large sharks.