This is a wonderful hike, and you can do it out and back (for any distance) or through to Vikingsholm (5 miles) (if you put a second car at the other end, or if you coordinate with another party to trade cars). It runs along the rim of Lake Tahoe, with awesome views of the lake and goes by osprey nests. We were able to see osprey and hear babies in the nest. The trail itself goes slightly up and slightly down, on average level.
There is no place to stop and picnic along the way. Take babies in backpack carriers. There is one spot that is a little tight where the trail goes between a rock and a handrail; otherwise it is completely doable. Families with walking toddlers might want to skip this one- there are precipices that could be hard to keep them away from. This is the only reason I pulled back from 5 stars. But if they are in a carrier, you can do it. No space for a stroller. Or, leave someone with toddlers at the beach near the parking lot while the rest of you enjoy the hike.