I love Madeira, and have been twice. The first time we stayed near Reids hotel, and the second time in the old town. There are loads of lovely restaurants in the old town, and a lot of stray cats who are well looked after by the restaurant owners.
We were also given the advice not to try getting a cable car if a cruise ship wss in. Luckily, we could see the port from our hotel and managed to avoid the queues.
Madeira had changed a lot between our two visits - more fast roads, extended runway at the airport and the cable car.
We took the cable car up to Monte and had a look round the fabulous gardens there. They are much more interesting than the botanical gardens. We didn't bother with the downhill sledge though.
Funchal itself is lovely with some really attractive buildings. The market is worth visiting as is the Sao Tiago fortress.
Either hire a car or book a taxi for a day or an afternoon and go to Pico do Ariero. It is the third highest peak on the island and absolutely beautiful.
We hired a car the first time we went and drove all over, but didn't fancy it this time so we booked a taxi for the day. The driver took us to Pico do Ariero, Santana (which was underwhelming), a rum distillery, a beautiful valley that had a trout farm and where we managed a walk along a levada and various other places I can't remember the name of.
The best activity we did was a dolphin and whale watching trip, which was absolutely brilliant. We saw whales, dolphins and a loggerhead turtle.
The boat is in contact with someone stationed on a high part of the coast and who can spot where there is something to see, so you are practically guaranteed to see some marine life. The guy doing the commentary was a marine biologist and was really interesting and informative. This was the highlight of our holiday.
You might find this website useful: