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I've only been to Bali once, but I thought Ubud was great, and from your description, sounds like it might be what you're looking for. Great place to just walk the streets, check things out at your own pace, loads of great restaurants & pubs around, loads of artisan shops if you're into that, etc. Everyone was extremely friendly, meeting locals was no problem, and not once did I get the feeling someone was trying to scam or rip me off.
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