Shallow coastal bays provide habitat for diverse fish and invertebrate populations and are an important source of sediment for surrounding marshes. The sediment dynamics of these bays are strongly affected by seagrass meadows, which limit sediment resuspension, thereby providing a more favorable light environment for their own survival and growth. Due to this positive feedback between seagrass and light conditions, it has been suggested that bare sediment and seagrass meadows are potential alternate stable states of the benthos in shallow coastal bays. To investigate the stability and resilience of seagrass meadows subjected to variation in environmental conditions (e.g., light, temperature), a coupled model of vegetation–sediment–water flow interactions and vegetation growth was developed. The model was used to examine the effect of dynamically varying seasonal and interannual seagrass density on sediment resuspension, water column turbidity, and the subsequent light environment on hourly time steps and then run over decadal time scales. A daily growth model was designed to capture both belowground biomass and the growth and senescence of aboveground biomass structural components (e.g., leaves and stems). This allowed us to investigate how the annual and seasonal variability in shoot and leaf density within a meadow affects the strength of positive feedbacks between seagrass and their light environment. The model demonstrates both the emergence of bistable behavior from 1.6 to 1.8 m mean sea level due to the strength of the positive feedback, as well as the limited resilience of seagrass meadows within this bistable range.