The south coast of Crete is a refreshing change from the north coast with its seemingly endless resorts. We stayed for 3 nights at a simple hotel called Milos at Frangokastello. We had a basic room with a small kitchenette (good for breakfast & lunch fixings). This is right on a quiet beach and has a beautiful shady area outside under the trees where you can rest, eat and relax. Frangokastello is not really a town. It's more of a collection of small hotels/restaurants strung out along the beach. There is a small grocery. Milos was very popular with German visitors.
But if you're looking for more of a small village, Chora Sfakion (which has several variable spellings) is a few miles before Frangokastello. This is a cute, small town with lots of hotels and restaurants and boats/ferries that go between towns on the south coast. It has all your typical tourist businesses. One day, we took a boat from Chora Sfakion up the coast about 15 minutes to Loutro and walked back on a cliff walk with the sea in view at all times. It was HOT (no shade) and rocky, but really a nice walk if you're in decent shape. I think it took us (moderately active 50-somethings) about 3 hours. Bring a hat, good shoes, and lots of water. There are a couple of places to swim and cool off along the way. This was one of our most memorable days.
Both of these towns are near the Imbros Gorge if you want to walk that (we ran out of time and did not.)