We visited Panama last August with our five year-old daughter. She loved the place.
PC area highlights for munchkin:
Embera Indian Village. Loved the tattoo and very disappointed when it wore off. Also got a big kick eating fish out of a bowl made from a huge leaf. Canoe trip there also a kick. (Anne Gordon's tour)
Playa Blanca. Loved the pools, the swim up bar, the beach and the kids program at night. Playa Blanca is all-inclusive and for two days, the buffet food is fine. (Downing all-inclusive few pina coladas will make you forget your unease with buffet food.) She also met some nice kids from different countries. This was my third trip to Panama and we only did PB on the recommendation of our Panamanian friends (and we are not resort people), but I am so glad we did. It was very relaxing downtime and I enjoyed watching my daughter make friends.
The two above places she still talks about. Other favs at the time:
Dinner at Mira Flores Locks. Sat on the balcony and watched the ship traffic. Loved waving to the crews.
Panama Viejo. My kid loves ruins.
Presidential Palace. Loved the herons and weirdly enough fascinated by the decor.
Overall, great trip for us, the friends and the kiddo.
Bring good waterproof/water-friendly clothes. We are glad we did since it poured while we were on the canal boat trip.