You're right that Albufeira is vast, but basically the Old Town is near the sea at the western end of Albufeira, and the Strip (Avenida Sa Carneiro) runs north/south at the eastern end. There is a headland between the Old Town and the Marina (further west) which is called Cerro Grande or Cerro da Piedade. There are lots of villas and apartments there and also all around the Old Town. There are also hotels in these areas but mainly half way between the Old Town and the Strip. Oh dear, I hope I'm not confusing you more!
It might help if you look at this map
. It seems to be playing up a bit at the moment for me, but if it does for you just click on anything in the box at the bottom left and that seems to clear it. You can then use the N, S, E and W arrows to move around. It will give you an idea of the various areas and how they relate to each other. If you know the street name of a hotel or apartment complex, you can search for that and it will take you there.
The whole website is a mine of information and I hope it will help you.
Two tips - when you're considering booking somewhere, ask how far it is to the Old Town, and is it walkable? Secondly, book soon as places fill up rapidly for August.
Of course, there are members on here who will be pleased to help you with any queries. Just ask!
Spacious penthouse apartment with spectacular views