LORETO, Mexico — It's been said that Cabo feeds the flesh and Loreto feeds the spirit.

The two Mexican Baja cities are separated by 250 miles and several light-years — although that may not be the case for long. Thirty years ago, the Mexican government designated five areas for tourism development — Cabo San Lucas, Cancun, Huatulco, Ixtapa and Loreto in Baja California Sur. The first four have flourished as tourist destinations. Development in Loreto is still in its infancy — but hurry, because as we know, babies grow up fast.

Loreto, with its calm waters on the Gulf of California, pristine white sand and friendly locals, is the Greek islands the way they used to be — but without the 15-hour plane ride to Athens.

Striving for a non-Cabo experience, Loreto has banned trinket peddlers from the beach and time-share hustlers from the airport.

So it was with a sense of urgency — to show my own "babies" (ages 8 and 5) that Mexico was more than five-star, all-inclusive resorts where everyone spoke English — that I decided to bring the family along on an assignment to Loreto for the Los Angeles Times' Real Estate section (unlike with most travel reviews, the hotel was aware I was a reporter).

What we found on a visit in late August delighted us. And what it did for us, restoratively, was nothing short of magic.

We booked a week's stay at the Inn at Loreto Bay, owned by the Loreto Bay Development Co., whose project I was touring. The hotel is just a five-minute drive from the airport and the center of town.

My daughter was the first to fall under Loreto's spell. Upon locating our room at the end of the horseshoe-shaped complex with its dead-on view of the clear, blue Gulf of California — all 155 rooms at the three-story hotel face the sea — Sophie, 8, immediately proclaimed this "our best family vacation ever!"

My husband, Vic, and son, Simon, soon hopped on her bandwagon. A vacation where swim trunks and T-shirts were all he needed suited my "I-don't-own-a-tie" husband just fine. My son, at 5, loved that he could see hundreds of little fish while he stood ankle-deep in the sea — and a virtual aquarium if he ventured in to his knees.

I was a bit harder to sway. Persistent ants in the bathroom, a doorless shower that resulted in a daily flooding of the tile floor (attracting yet more ants), a balcony rail that registered unsafe on my Mommy-o-Meter. But even those concerns melted away by the end of the first day.

It wasn't that things were perfect. It's that there is something about Loreto that makes you not care about the imperfection. And most of the imperfection we found was with the hotel — a wait staff that tried to please but a kitchen that disappointed; a pool kept clean but with missing and loose tiles from deferred maintenance; a pool bar as the only non-buffet option for dinner — and the only option for lunch.

But who cared? Not us. We love the place and are planning to return.

We had chosen the all-inclusive rate of $800 a person, which combined our round-trip airfare on Alaska Airlines, seven nights at the hotel, all meals, Mexican alcoholic beverages, soft drinks, bottled water and unlimited use of non-motorized water-sports equipment — snorkeling gear and kayaks. We rented a car with manual transmission for about $350 for the week, figuring our restless natures would make us want to explore the Baja peninsula.

But that's before we succumbed to Loreto's spell. We barely budged, except to go into town for a few dinners away from the hotel and to poke around.

We swam in the placid sea; we moved to the poolside chaise lounges for lunches; we lumbered back to the shade palapas on the sand for siestas. We waited by the fishing shack to see who brought in the biggest catch of the day; the sport fishermen, who flock here from Southern California, rose each day for a 6 a.m. boat departure and returned by mid-morning having met their daily quota of two Dorado.

We walked along the shoreline, building up an impressive collection of seashells. We floated lazily on our rafts in the calm sea, disturbed only when a school of fish jumped out of the water next to us. We watched the pelicans divebomb for their dinners and the seagulls pick up the remains. We read. We snorkeled. We played Old Maid.

We woke up eight days later and couldn't remember a week that ever flew by faster.

It took the helpful concierge to shame us into taking an actual excursion; she said it would be unconscionable to come to Loreto and miss seeing Coronado Island. I resisted at first. A beach is a beach is a beach, right?

Wrong. Coronado is simply magnificent. It, with the other small islands around it, is part of Loreto Bay National Marine Park, accessible only by small private boats known as pangas.

Whale season isn't until winter and early spring, but Loreto Bay is home to 29 marine mammal species — said to be the most in all of Mexico. There are 15 species of whales, 17 species of marine birds and five species of turtles that frequent the area.

To the children's delight, our speedboat captain, Ramon, circled the island and brought us close to baby sea lions sunning themselves on the rocks before he deposited us on a breath-stealing pristine white sandy beach in a little alcove. The water was turquoise green and crystal clear.

While we played, Ramon napped under a palapa, joined by two other captains. Other than their passengers — a family from Italy and honeymooning New Zealanders — the beach was all ours.

We booked our island excursion through the hotel, paying about $50 a person, including for the children. Ramon supplied the lunch — ham-and-cheese sandwiches, cold drinks and bags of snacks. We chose the convenience of having the boat come to us instead of driving into town and shopping for our own food, but had we been less lazy, there were captains at the Loreto marina willing to take the four of us for about $100.

The city of Loreto is an interesting place to explore on foot. In the central plaza is El Museo de las Misiones (the Missions Museum), a small spot that, for the $3 admission, is a fine place to meander for a half-hour or so. It details the history of Baja California's development, with much credit going to the Jesuits. Signs are in Spanish and English.

Down the street from the museum is El Caballo Blanco (the White Horse), a used-books store run by Beto and Janine Perez, an American couple who retired to Loreto 18 months ago. The shop is a gathering spot for a growing expatriate community.

Janine directed us to Mediterraneo, a high-end seaside dinner spot that serves a killer paella. Listed on the menu as "$42 for two," it amply fed three of us. Simon had pizza with fresh tomatoes and some piping-hot homemade minestrone soup — my version of getting him to eat vegetables. Non-Baja wines are pricey, and the one we ordered pushed our bill to $85, but eating outdoors under ceiling fans and watching the full moon reflect on the ocean made it worth the price.

Another of Janine's suggestions brought us to lunch at Santa Lucia, where we enjoyed grilled chicken on freshly baked baguettes. They were a bargain at $6, made even more so when we shared one among all four of us.

But the August heat trumped the sea breezes. The children became restless and eager to return to our hotel pool and beach.