Long-time visitor and current "resident" (family vacation home) of HHI.

I think for what you're looking for (the ability to walk to beach/restaurants, etc.) Shipyard is definitely your best bet. Palmetto Dunes is too far away from much of anything, same with the Folly Field area. That's kind of no-mans land on the island.

Sea Pines is expensive and very spread out. I would avoid staying there; if you stay anywhere else on the island, you can pay the $5 entrance fee to go to Sea Pines for a day and see Harbour Town, the lighthouse, the Salty Dog cafe, etc.

Don't believe that all areas of the island are created equal. The further you get from Coligny Circle and Shipyard/Sea Pines, the more spread out and corporate stuff becomes. I personally wouldn't stay anywhere but Shipyard or the North Forest Beach/South Forest Beach area (either side of Coligny Circle).

From Shipyard or either end of Forest Beach you can walk (or easily bike - I would be sure to rent bikes, the best way to get around the island) to Coligny Center, which is like the "downtown" of HHI. Lots of good bars/restaurants in that area. You'd also be close to Coligny Beach, which is the main public beach on the island. If you stay at Shipyard, though, you'd have access to the Shipyard beach club, which is a private beach and less crazy than Coligny, typically.

I've eaten at basically every restaurant on the island. Most are overpriced, mediocre, and designed to bilk tourists out of their money. Believe me.

My favorite places for dinner:

1. Wiseguys - upscale American cuisine. Far and away my #1 on the island.
2. Skull Creek Boathouse - great sushi and seafood. Gets extremely crowded so get there at 4 PM (trust me on this one).
3. Marley's Island Grille - a distant third for me, but they have decent food and it's close to Shipyard.

Note that Wiseguy's and the Boathouse are on the other end of the island from Shipyard and Coligny, so you'd need a car. While I've biked from Shipyard to Wiseguys before, it's like a 10 mile ride.

Best lunches:

1. Kenny B's - near Shipyard/Coligny. Kind of a dive, but great cajun food and seafood.
2. Sea Shack - a total dive, but excellent seafood. Near Shipyard.
3. Wild Wing Cafe - good wings and pub grub. Close to Shipyard.

Best bars/happy hours:

1. Lodge Bar - love this place. Can walk/bike/stumble there from Shipyard pretty easily. Great burgers and craft beers.
2. Big Bamboo - right in Coligny center. 2 for 1 drinks for happy hours and great apps. Also a great concert venue at night.
3. Salty Dog - in Sea Pines, so costs $5 to get there. Great frozen drinks. Subpar food.

I'm to the point where I literally won't go anywhere else on the island but the above places. I've found that every time we venture out and try a new place, it sucks. Experiment at your own risk

As someone else mentioned, there ain't much else to do on HHI but go to the beach, swim, ride bikes, eat, and drink. Hope you can stay entertained with those options - usually I can't!

Also, if you've never been to Savannah, I wholly recommend it for a day trip and to break up the monotony of HHI. You can be in Savannah from Shipyard in roughly 50 minutes.