Don't you have any other choices? Most people like to visit about 5 daycares to find the best match for their family. I find it strange that they don't have activities and just freeplay nonstop. Do they make any crafts at all? Even babies that age can fingerpaint and use waterproof markers and should learn all kinds of activities. They sound sub-standard to me, but I'm just going by what I read above.

Always trust your parental instincts! Don't be afraid to ask lots of questions and get proper answers, don't be timid, this is your precious baby.