We had a wonderful stay in this apartment which is a couple of minutes walk from Funchal old town. It's at the eastern end of Funchal within a few minutes walk to many bars and restaurants and it's also great for Funchal sightseeing as everything is in reasonable walking distance.
This apartment is in the town, so you will experience Funchal life including the normal town noises like the local dogs barking occasionally, the church bells ringing (though they do stop at 9pm), the odd bit of traffic noise and music from the local bar..... BUT it is simply the hubbub of life in a quiet part of town well away from the high rise Hotel area.
We loved the flat because it is well equipped and so we could eat in if we chose, but also because there are lots of things in easy walking distance. The owner has provided lots of very helpful things to help with your stay (like maps, guides and recommendations) and the cleaning service is excellent.
This was a bit like a little home away from home, but with a lovely sunny south facing balcony where we could just sit in the sun some days (even in January).
We had such a wonderful stay that we will definitely return.
Just a couple of points for others looking to stay at the flat... it does have a few flights of steps, so would not suit the infirm and like many streets in Madeira, there are lots of cobbles - so take some thick soled shoes :-)