I am a single female traveller coming to Chicago in August. I am interested in design, modern art and music. Can anyone suggest interesting smaller art galleries and cool laid-back blues clubs?

Also which would be the hippest neighborhood to stay? Or at least I'd like to stay somewhere with a good public transport connections or walking distance to the hippest areas. You know, a place with street side cafes, funky vintage boutiques and used record stores.

I wanna avoid the obvious tourist traps and see where the locals hang out. Any ideas?

Bucktown is the place you want

Not sure there are any hotels in the area but you can try www.vrbo.com for a short term apartment rental

If not, then look for a hotel in the North River area.

Public transportation is really good in Chicago, so no worries there. Get a multi day pass. www.yourcta.com

For the latest info on entertainment, galleries, restaurants, etc. check out www.chicagoreader.com or www.metromix.com

Have a great trip to one of the best US cities.

I meant River North

Bucktown will also include West Town, Wicker Park.

River North, Wicker Park/Bucktown, and Andersonville are all worth looking into.

I haven't been to many blues clubs, but if you're in River North, try Blue Chicago on Clark Street around Chicago Ave. I've been there a couple times, it's a nice time. There's an excellent bar right near by called Clark Street Ale House. Recommended.

I know nothing about art galleries, but there are a couple in Andersonville (where I live).

http://www.andersonvillegalleria.com/

Maybe that is of interest. Either way, A'ville is worth an afternoon's visit if you feel like getting out of downtown/River North. Many quality restaurants and a couple of good shops and bars.

Definitely check out Time Out Chicago http://chicago.timeout.com/ for galleries and other art/design type things.
Columbia College is also a good place to check out: they have a gallery devoted to book and paper arts, as well as a museum of contemporary photography http://mocp.org/

You may also like the Museum of Contemporary Art, and don't bypass the Art Institute: they do have interesting modern art collections.

For accommodation, I'm not sure what your budget is, but if you don't want to go the VRBO route, look at http://www.wickerparkinn.com/
http://www.twourns.com/
http://www.chicago-bed-breakfast.com/index.html