place to stay in Oaxaca and best things to do

Frostbite ..not too concerned with safety per se although of course we don't do anything foolish.

We've visited Patzcuaro 7 times over the years and stayed in both Casa Werma and with Victoria Ryan at the Casa Encantada so we do like smaller b&b type places where you can meet other travellers and benefit from a local owners insight. I'm just not sure about the distance from the Casa Colonial to the areas we'll want to visit which is why I'm asking. We tend to wander, we love markets ( I can easily spend 3+hours in the market in Patzcuaro), we like historical buildings and history. We will often go out for a few hours then head back to accommodation to drop parcels, change shoes, use facilities etc.
DH really likes mezcal so I think a few mezcal tastings will be on the to-do list!

Talley Ho than you very much for your list exactly the type of information that is also helpful.
This will be our 13 year of spending 2-3 weeks in Mexico and the second of not visiting Zihua/La Barra. We do miss the area but thought there's so much more to explore and we're not getting any younger so this year we did Queretaro/Guanajuato/Puerto Vallarta/Quimixto. (Have to say that Zihua has it all over PV in my books!)

Next January we're heading back to DF for the first time in 45 years plus Morelia ( friends there) Oaxaca and San Agustinillo.