Hello largolane, me and the wife stayed here a few years ago for a new year break, so they had not done the refurb then but it was a very nice hotel then and should be even better now, the breakfast was first class.
It is the first hotel as you walk out of Funchal past a big park but it is up hill, so if you pick any of the other ones they are even further up the hill.
The walk to the town is as safe as you will find in any other resort, it has proper pavements as you pass the park on your right at the bottom of the hill there is a road island one way goes to the town and the other right takes you to the harbour.
The town has a old part with some fine old buildings/fort and Cathedral. There is a cable car up to a hill (Monte) near the bus stop were you can if you want get in a wooden sledge thing for a ride back down the hill, but they don't take you all the way down and it is a bit of a rip of. Up the Monte is a old church (Nossa Senhora do Monte) and pubil gardens (Jardim do Monte) and the (Monte Palace Garden) both very nice.
The Marcado dos Lavradores is a great flower market fruit and veg and also a fish market, just at the back of this is all the restaurants in the old fishermens quarter, there are that many to choose from and most are realy good. Prices are not over the top from what I can remember.
As for trips you can get a boat to Porto Santo for some great beaches, as Madeira is a bit like Tenerife it has not go any proper ones, we also did a trip round the west side of the island and you get to see some great sites, but as with all trips don't book with the tour firm as the charge an arm and a leg, use a independent shop to save money.
Last the walk up the hill is not to bad if hubby is fit.

hope this is a bit of a help,
Dave.

Try to make certain that you get a sea view. A lot of the rooms look out from the back of the hotel with no view at all. Its a great hotel with a very central location.
(My daughter works for Pestana )

We have just come back from Madeira

We have a 10, 3 and 1 year old so we opted to stay in a villa (madeiravilla.com)

We know the Pestana Casino Park and we think you would be better off at the Pestana Carlton Madeira

It's about 150 yards from the Casino Park but has better facilities for kids, and generally therefore has more children staying there.

Easy but steep walk into centre but you are also close to a good park with a nice children's play area

Lots of good restaurants + things to do + see

Car hire is a good option but you can book a taxi that will take you round the island for about 60 euros

Although both the Carlton and the Casino are 5 star hotels the Carlton is dearer.