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It can be a great area to raise a family. It's close to the water and has some great parks with beaches, kite flying, hiking trails and gorgeous sunset views - lots of fun things to do with a child. As far as neighborhoods, there are pockets that are very nice (million dollar + homes) and pockets that are not as nice (run-down), so really depends on the neighborhood.
In general, it is primarily quiet and residential. Quiet, unless you are underneath a flight path. There is an airport, Paine Field, in the area. It does not provide commercial air service but Boeing uses it for it's jet test flights. Other than that, it's mostly small private planes, Fed Ex flights, etc. Not terribly busy like a regional airport, but something to keep in mind when you are looking at location.
The closer you are to highway 99 (and the airport), the less-desirable the neighborhood is. The further west you are, the closer you are to the water, and views and it improves. The worst area is between highway 99 and the airport.
There is a large development of expensive homes and condos called Harbour Pointe. This is a good area to be around. Harbour Pointe has brought a lot deal of prosperity that wasn't there 30 years ago. The Mukilteo School District schools are new and well staffed and look nice on the outside. If the neighborhood is served by the Edmonds School District, the schools are not as nice and are much older, but not terrible (just not the best, either).
There is a small freeway that connects to 405 and I-5 and Alderwood Mall which makes it much less isolated than it could be. There are several grocery stores, restaurants, service outlets and a medical clinic close by.
Mukilteo also has a great family center called the YMCA. They offer swimming lessons, children's sports, activities, etc.
Both downtown Edmonds and "Old Town" Mukilteo are really cute, too.
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