Jools, I agree with all the above, but "billy the greek" at Kalloudis does have a couple of yappy little dogs which do come into the bar area. Billy is usually with them but they do sometimes run ahead. I'm sure it could be scary for a young child who is already scared of dogs, but it may also help the child overcome their fear. You'll see a picture of Billy with one of his dogs riding his scooter on the forum, so they are not always running around like loons.
You won't find a more friendly resort than arillas, and Kalloudis is a very family friendly place with great food and good company.