The area by Shueishe Pier is a great place to kick back or go for a leisurely stroll. Lakeside walking paths extend from Shueishe village (often referred to as Sun Moon Lake Village) in either direction. Going east would take you 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 (the night view is not too shabby either).