Hey, books, I resemble(d) those hunched-over undergrads!

Caveat: my own tastes may lean more towards the gritty and urban than yours. Always, always tour around any neighborhood you're looking to move to before committing; besides, it's a great way to find "For Rent" signs.

I'd third Bridgeport, if you can't afford Kenwood. The Red Line to #55 bus (or maybe the 35th St. bus to Cottage Grove bus) works better for the Hospitals employee, since they're are a good mile west of the Metra Electric and #6. It's largely single family and inexpensive, there's old-fashioned retail (e.g., diners, not Starbux), it's safe, and it's got a dynamic ethnic mix with Chinese grocers, Mexican ice cream carts, etc. If you do have young kids, Perspectives Charter and National Teachers Academy recently opened for K-8, ~1 mile north of Bridgeport. One issue: you won't find much Bridgeport housing in the usual venues, since places often go by word of mouth or in very local newspapers. And if Midway access matters, it's just off the Orange Line.

(Bridgeport has gentrified enough to merit a NY Times mention; it's a "new" option since the time when I was a trudging undergrad. I recently noted to a friend of mine who lives in Hyde Park that it must be quite strange to have the city's avant-garde art scene three miles, not thirteen miles, from the university!)

Kenwood has huge and beautiful old houses, but I doubt much is available for rent and the retail's a bit remote. North of Kenwood is Bronzeville, which is gentrifying spectacularly quickly but has almost no retail.

Pullman's a quick commute from Hyde Park and it's cheap, with gorgeous houses, but there's nothing to do once you're there.

If you're the sort who's good about being on time, take a look at this:
http://www.uchospitals.edu/pdf/uch_003496.pdf
CTA runs a rush-hour express bus between the downtown commuter-rail stations and the hospital complex. That theoretically opens up the west/northwest/north suburbs, like Oak Park (and neighbors Berwyn, Forest Park, and River Forest) or some of the north/northwest side neighborhoods along the commuter rails, like Ravenswood (North Center), Old Irving, and Mayfair (Jefferson Park). The north/northwest 'burbs are probably both too far and too expensive, and I suspect the same is true of Ravenswood.

One inherent tension among your criteria: most areas with shops and restaurants within walking distance (1/4-1/2 mi.) don't have cheap single-family houses. Maybe it's because those shops become a desirable amenity that drive up housing prices; or maybe shops need lots of shoppers and thus higher density, but regardless, it's an unlikely combination.