People often refer to Shueishe Village as Sun Moon Lake Village. The area by the Shueishe Pier is a great place to hang out. Lakeside walking paths extend from the village in either direction. Going east you can walk all the way to Wenwu Temple.
Meihe Garden , on a ledge above the village, is a heavenly spot to hang out on a sunny day (and the night view is pretty charming, too).