How exciting! : )
We didn't do a separate cocktail hour (we did one the night before instead) and just had the dinner function set up for three and half hours. So I'm sure it could work, but I'm not sure how they set up additional furniture for the cocktail hour. Maybe you could see if they could do the cocktail hour down on the beach or something (there will be an additional $6 per person set up for the beach location), and then have the dinner up at the terrace?
We wanted all of our tables set up on one side of the pool instead of 20 people on one side and 20 on the other since it felt weird without a dance floor in the middle, so you could get three tables set up on each side of the pool with the dance floor in the middle (below is a picture from another wedding I saw on here where they had a dance floor, so you can see how that looks.)
But I would probably suggest going with smaller set-ups for the lounge stuff. You could let them give you suggestions for what would fit amongst everything else since there might be some random little areas that could fit a lounge area for four people and then a couple for six or whatever. Larger sets of 10 might be a little too tight amongst all of the tables and the dance floor. Another thing that was nice is that people obviously go up to the bar, so that's another full area that give people room to hang out. If you haven't already done it, I would definitely recommend doing some kind of additional lighting through Zuniga. It's bright enough with the lighting up there, but it helps to give it softer light. We went with 16 tiki torches, which we loved, but the lighting in the picture above with the dance floor looks so cool, and we saw a beach wedding with it too, and it looked great!
We went with the Mexican buffet since we figured that was the safest choice with appealing to a lot of people, and we really liked it! It was different from what we had been eating all week (the only thing that was similar was the fajita meat, which was good : )), and a lot of people commented about how they loved it. When we did the welcome cocktail hour the night before, we went with the International Hors d'oeuvre menu, and they were really good too.
We got our professional pictures back now, so here are a few more pictures where you can see the layout better.
You can see the entire empty side where you could set more tables up.
We had four tables of 10.
You can see the buffet behind them, which was set up all along the back-side where the two terraces connect, so it was perfect and out of the way.
Let me know if you have ANY other questions I can help with!! : )