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Naxos - Hill top Villages-places to stay?

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We are starting our trip with 4 nights on Santorini in Oia and ending with 2 nights in Athens. In between we have decided on Naxos then Mykonos. I am researching exhaustively and am having trouble making my final decisions about Naxos and Mykonos. We have 8 nights to play with and are debating on either 3 nights Mykonos with 5 nights Naxos, or 4 nights on each. Our vacation to the Greek Islands is to experience the culture, food and hospitality of the local people. In our hotel stays, we prefer to be on or near the water or at least have fabulous views. We also like to be able to walk to dinner at night so we don't have to drive after having cocktails or wine. We are looking at all of the places reviewed from Naxos Town and outlying beachs. We had contemplated staying on Alyko Beach, but after all of the blogs we read, decided that staying closer to Town would give us better access to seeing the rest of the island on day trips. If I had 5 nights on the island, I would contemplate staying 3 nights near town and spend 2 nights in another area of the island. I have not run across any blog or travel advice on staying in a hilltop town or any other area besides town and the south/south west beaches. Has anyone been to other areas on Naxos where you thought it might be nice to spend a couple of nights? We wanted to do some of the walking trails. Should we just concentrate on days trips for these? I am assuming that day trips to other parts of the island are reasonable because no one has mentioned driving the car, hanging out for dinner somewhere and staying overnight....Any advice out there on this would be most appreciated. Thanks!

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