Yeah, comparable rooms in Taormina with views like that are far more expensive! Castelmola is much nicer than Taormina aswell I think - far less touristy but Teatro Greco is well worth a visit and it's so nice to get the cable car down to the stunning beaches at Mazzaro and Isola Bella. The bus stops right outside the hotel to take you down to Taormina!
We had delicious food and wine at La Caverna next door to the hotel and also delicious pizza at Bar Turrisi (try and get a table on one of the upper balconies for a view). Also if you walk around the corner on the right from the square in front of Bar Turrusi there is a panoramic terrace in front of St Nicholas' Church with an unbelievable view of Etna and the coast! Especially at sunset. We also ate at La Taverna del Etna but the food wasn't great and there is only a good view from the very front tables on the terrace which are booked months in advance.
I am quite sure your husband is going to have an amazing 40th.. !