Morro Bay is a nice place to kayak. We like to paddle around and watch the seals and the otters. We try not to get too close and spook the wildlife. This is one of our favorite places to kayak because of the wildlife. We also proceeded to the sand dunes where we parked our kayaks and had a lunch.
Yes you have to watch the tide because not only will the southern areas get muddy but so will areas next to the dunes. Their is an abundance of wild birds on Grass Island towards the southern end.
We usually camp at Morro Strand. It is right on the beach and not too far from the bay. It offers a great view of the rock from the beach.
No fees for launching. We launched at the marina near the embarcadero. You can also launch from the marina near Morro Bay State Park. Or you can launch at a point near the power plant.
Just follow the highway signs down (or up depending on which direction you're coming from) highway 1 and you'll reach your destination.
Read the entries on the web after googling Morro Bay and you'll probably get the info you need.