For the classic Santorini experience, one must stay in Oia in the northern tip at the facing the caldera. The island of Santorini is compact - driving from Oia, the north end, to Kokkinopetra in the south is a bit less than 30km drive. Santorini has so much to offer that it is not only suitable for a romantic retreat, but also a holiday paradise for everyone.
Yes, the accommodations in Oia are more expensive and the restaurants, mostly mediocre and expensive (but if you do a bit more research and reserve, one could also make a gourmet holiday in Oia). It is crowded as most of the accommodations are within this village with population under 2,000. Overcrowded? Touristy? Nightmarish parking? Yes, but it is Oia, that image that you see in most postcards or advertisement from Santorini. Of course it is possible to visit Oia during the day and stay in other parts - even one km away from Oia the price of hotel is much cheaper and with much more space.
Imerovigli and Firostefani are alternatives of Oia. Many accommodations also offer the caldera and sunset view but with much more space to breath - at least there are much less day tourists. There are also more variety of shops, restaurants and cafes. If one does not want to stay at the waterfront, these two villages also have extensive choices.
Thera is the main town where the famous cable car is. It has a long winding shopping streets and a large square where many wait for hours for the famous sunset in the caldera. It is a hub - also for cruise ships visitors - for shopping and restaurants. Expect a lot of traffic and tourists.
Other parts of the island
There are indeed many beautiful beach front accommodations on the island. While the villages in the north or northeast do not offer beaches for sunbathing (but many has own swimming pools), the villages on the east and south east have many beaches to offer. Such as Monolithos and Kamari, bothe next to the airport. In Akrotiri in the south, there is not only the archeological site, but the White Beach and the Red Beach. Perissa, in the southeast, is not only famous for the Black sand Beach, it is also closed to the ancient Thira settlement on top of the hill. There are also many activities such as visiting historical settlements, horse riding, swimming and snorkelling - therefore, besides the romantic Oia, Santorini can also be a place that offers a quiet friend's getaway or a family holiday.