Portugal Help with December itinerary and accommodations

If you want to see Portugal, I would not spend a week - or any time at all - in the Algarve since it’s basically a summer tourist destination and many businesses will be shuttered in December. I think any advice on where to go and what to see is predicated on how you intend to travel. Rent a car or public transportation? Are you visiting the Algarve because that is your probable retirement destination? Are the other listed locations for the same reason or for sightseeing? A little more specific info would help to answer your questions.

Cristina Duarte guides many of the RS "Best of Portugal" tours.
She has a tourist site: http://www.lisbonbeyond.pt/faqs.html.
You might want to contact her.

To add to my initial post, we will be renting a car for travel. We can trade a time share week from RCI, one of the reasons for staying in the Algarve for a week, plus we heard it has an expat community there. We may have to rethink that then and see which other areas would be best for community. Don't really know too much more as I have only begun my research. We like to visit wineries, museums, historical sites, parks for hiking, small towns to name a few. Some areas we are looking at to see if we would like to spend a few months of the year in, which town we would like to settle in. We tend to like areas similar to Tuscany in Italy, the countryside, unfortunately Italy is too cold in the winter. Hope this helps clarify a bit. Thanks again.

There is an expat community in some parts of the Algarve such as Lagos and Cabanas near Tavira. Other villages such as Altura will be ghost towns. Many of the people that I have met there also retain homes in the UK etc and head back home for Christmas.

You can’t cover all the towns on your list easily from one base as the two furthest points are about 5 hours drive apart.

Unless you have an EU passport, you will only be able to stay for 90 days, not 3-4 months.

Considering your interests, the places you want to see are between roughly between Lisbon and Porto and within an hour's drive of the coast.

If Italy is too cold for you in the winter, I wonder if Portugal on the Atlantic will be warm enough for you.

I agree with skipping the Algarve, especially in December. Yes, there are expat communities there but also in most of the other places you listed.
The Lisbon and Porto have the biggest concentrations with Coimbrã and Caldas. Óbidos is likely too small for many expats.
I live in the Lisbon area, where there are many expats and organizations to help you make friends.
And, yes, you can only stay 90 days without going through the residency process, which is getting more difficult as time goes on. But, it’s still easier than most other European countries.
For the holidays, December 25 is really the only day you need to worry about. All hotels will be open for meals but little else besides Indian restaurants.

The west coast of Portugal can be windy all year round. Evenings can be chilly, so you will need a place with heating, even in the Algarve.