Hi Dominic.
I was at Kho Nangyuang 8 years ago. Maybe things have changed. The location is amazing, extraordinary beautifull. But the resort was running very, very simple. In fact there were some of the bungalows that u must cross with the water to your neck (High tide) or to your knees (low tide). And really its not nice by night. In that moment not all the bungalows had 24h electricity so cross with the water to your neck, arms up to try to keep thing dry and completily dark was sometimes funny sometimes not
but again, i think they have make new luxury rooms with all facilities.
Its also a point for day tourist, so during the day u can find those gorgeus place full (very full) of people....
For the diving, that time they dont have a dive center in the resort so they work with a dive center from Kho Tao, they come every day to take u and take u back in the afternoon...we were there in August, and even they said the moonsoon dont afect the west cost as it does in Andaman, was raining and the sea was rough for the 10 days we were there and was not very confortable the way back to hotel...specialy thinking that u have to take a new swing to go to ur room and u dont have any hot water in them 
For the diving... Koh Tao is a divers factory
its very, very cheap to get any course so its plenty of young people having fun by nights and diving in the mornings. For me the diving was poor, but maybe was bad luck...who knows 
I hope this help u.
Cipriano.