We loved our stay in Santorini - what a beautiful town! Although the town of Fira is about a 20-25 walk... I would suggest renting an ATV (20 euro/day) as it's the easiest way to get around the island.
The pool was great to have, you must pay to rent beach towels but that was fine with us.
We also were not aware that the place was a hostel as well - but this was not an issue as the visitors in shared rooms were every quiet :)
The two front desk people were extremely helpful in giving us information about things we wanted to see on the island :)
All in all - we loved the cave and would stay there again!