Pstzcuaro & the surrounding lake villages each with a unique craft can occupy several interesting days.
Uruapan with it's wonderful National Park & the near by ruins at Tinambato are also of great interest.

Be advised that Patzcuaro may be pretty cold in February because of the altitude. Wet, too. We needed a fire in our hotel room fireplace one night in August. Brrrrr

Here is a link to my trip report from our Morelia/Patzcuaro trip. It was a couple years ago, but a fantastic trip. I highly recommend our tour guide.

http://www.fodors.com/community/mexico-central-america/mexico-city-morelia-patzcuaro-zihua-trip-report.cfm

Thank you guys for the great advice. We had a great trip. Stayed two nights in Morelia at Hotel de Virrey - don't buy the Fodor's suggestion to stay on the outside rooms. Noisy but great place. Saw the Mariposas; Patzcuaro had lunch on the lake and went to Santa Maria de Cobre. Had a great guide as well Miguel Angel Rubio Martinez (marm_68@hotmail.com). Then we were driven by Miguel to Queretero which we loved and stayed at the Casa de la Marguesa (gorgeous, roof top suite with hot tub, deck and city views - okay service), a historic inn. Awesome town center and spent three days there just having fun and catching spontaneous events and meals. Saw a national Falmenco Competition on the Plaza de los Armas etc. Just hung out as we were sick of the driving so we missed San Miguel etc but that is for next time. Flew to the Baja for five days after and stayed at La Mission which I highly recommend (see if you can get the friends and family package - lots of great discounts). Kayaked with the dolphins, snorkeled saw the sea lions and did some desert hikes. Great trip and easy to get around. Super friendly people. Had some great restaurant finds if you need them and discovered this awesome roof top garden bar restaurant in Queretaro. In Loreto we found this seafood shack called Vista al Mar on the sea with nothing around. My friend had to wait ten minutes for them to drive in a freshly caught snapper for lunch from a town just north. Happy travels! Jim

Please share your restaurants in Morelia and Queretaro. we were recently in San Miguel and plan to go back soon to see the other cities nearby. Loved that area!