Marilia's apartment in Alfama was perfect for the 2 of us. It's compact but contained all we needed. The beds upstairs would suit a couple of children but 4 adults would be a squeeze and there's little privacy. As mentioned in other reviews the flat is on the 3rd floor but the stairs were fine. Alfama is not the place if you have mobility issues as the alleyways all go up or down hill and are either steep cobbles or stone steps. Our taxi dropped us off at the Fado museum and it took less than 5 minutes to walk to the apartment.
The location in the centre of the Alfama district is ideal if you really want to experience the authentic Lisboa. The maze of alleyways is fun to explore and we always seemed to find a different way back to the apartment at the end of the day. Alfama is still full of local character and we never felt worried for our safety at night.
There is a superb bakery in the street below the apartment but be prepared to queue in the morning as its very popular. That said the Pastel de Natas are well worth the wait, as are the pastries, and the bread and the savouries. There are dozens of small restaurants within a short stroll, all with resident Fado singers in the evening. Generally the fewer items on the menu the more seriously they take the music; so much so that talking while the music is playing is frowned on.
On the subject of Fado if you open the apartment windows in the evening you can listen to the mournful notes of the singers from the street below. Better still when the windows are closed there is silence. Really the best of both worlds.