I realize that Galway and Salthill are situated next to eachother, but which is the better place to stay. We will be traveling there in Mid-July.

That depends on you as much as on the places.

I'd always take Galway over Salthill, but that tells you nothing about which you might prefer.

I would say that we enjoy nice restaurants and a bit of bustle, not much into the crazy party scene, more a relaxed pub scene. Is there more to do in Galway vs Salthill? Which is more picturesque?

More nice restaurants in Galway; more bustle (and some partying); I like the pubs there better; more picturesque.

Salthill offers sea views and a mostly stony beach -- and easy access to Galway.

Galway would be my preference too but Salthill offers good access to Galway and at this stage with only a few weeks to go I imagine your choice will be determined by where has availability.

If you find a couple of places that are available and let us know the names/locations we can compare and contrast.