We stayed in a little island called Kolomata which was about 30 mins out from Dubronvik on the ferry then a 5/10 mins taxi ride from the old town. There are a few various options regarding islands there so I'd look around. Nice hotels and beaches with quick access to Dubrovnik.
100% do the walls. You won't regret it and if you are I'd recommend booking an airbnb or something in the old town for the night. The place is spectacular at night and rids itself of cruise ship tourists and becomes more chilled out.
I also took the day trip to Kotor in Montonegro and it was amazing. I loved it. Again, depending on fitness, do the walls! Sadly the one thing I didn't do as the Mrs wasn't keen. The pictures to be had up there though are second to none.
Generally speaking I would say its similar to UK prices.
I have some pics from there on my portfolio site (Kotor/Kolomata/Dubrovnik:
https://jamiesteel.myportfolio.com/photographyexperience