You gotta go to Sloppy Joe's. Also, El Siboney (Cuban food) on Catherine St, but get there early as it does get crowded. For Mexican I would go to El Chico. Good food and reasonable prices. And don't forget to check out the sunset at Mallory's. Down by the marina are some good seafood places.
For flies I would check in with either the Angling Company http://anglingcompany.com/, or check in with the Saltwater Angler on Front St. They are an Orvis shop and you can find them on the Orvis website under fishing reports.
Thanks for the recommendations, my wife has put them in her list of places to go and I will check out the angling stores.