Here are two websites that might help with your decision-making: http://www.greek-islands.us/, and http://www.greecetravel.com/crete/.
I can't imagine going to Crete without going to the Palace of Knossos and the Archaeological Museum. You can buy a ticket that covers both.
In October we spent a total of 5 nights on Crete. Two of them were in Heraklion with the day between spent visiting Knossos and the museum. The other three were in Chania, mostly hanging out, doing laundry and including a trip to the Go-Kart track for my husband. It rained a lot while we were there and he just managed to catch a break in the weather to do it.
Our transportation included the typical options for Greece:
We got a good deal on Aegean and flew from Athens to Santorini.
We took a Flying Cat fast ferry from Santorini to Heraklion.
We took a city bus from downtown to Knossos and back.
We took the long-distance bus from Heraklion to Chania.
We took the city bus from Chania to the port for the overnight ferry to Piraeus.
We would have flown back to Athens from Chania, but it was cheaper to take the ferry, even with a private cabin, than to fly and it was another experience to add to our trip. We did not find the bus rides, long or short, to be onerous. We found them interesting.
In both towns we stayed right downtown and walked everywhere we could.
I can recommend the Hotel Lato (http://www.lato.gr/the-hotel) in Heraklion. It is in walking distance of the port, the long distance bus station and the city bus to go to Knossos. It was modern with great views, a great breakfast and an elevator. Our room was on the 4th floor, the same as the outdoor restaurant. We had a great view and a very nice balcony, which was fenced off from the restaurant. We were supposed to go down to the ground floor and take a separate elevator to the restaurant and vice versa to get to and from our room. We were almost the last people there the night of our arrival, and when our waitress found out our room number, she guided us through the kitchen to the hallway where our room was. That was fun. And the coffee I had there after dinner was the best of our whole trip.
I was not as happy with the Hotel Vilelmine (http://www.vilelmine.gr/) in Chania. It was quaint, much cheaper, no elevator (old house) and we had a nice room with a balcony and a good view, but the breakfast was not included. It was in the connected restaurant and was overpriced for what we got. We only ate it one morning and didn't eat anything else there. There were plenty of other good restaurants within easy walking distance.