Azores itinerary/hotel recommendations in Terceira
 

Hi All-
My BF and I will be in the Azores and spending 4 days in Sao Miguel, 4 in Terceira and 4 in Lisbon in March.
We love to stay in towns within walking distance of restaurants, etc. We don't like the new, resort hotels. We lean more towards historic areas and historic buildings. If that makes sense?
Any recommendations?
Thanks in advance!
Alice