We stayed at Pedro's place for 5 nights and it was perfect! You are right in the heart of Alfama and easy walking distance to central Lisbon and the waterfront. There is also so much to explore around your immediate area that you'll have plenty to do during your stay. You can also have a beer on the balcony whilst listening to Fado from nearby restaurants.
Places usually close around 11-12pm so up to that time it can be quite noisy and with glass bins etc. However this has to be expected because of its great location! If you want somewhere quieter it's going to be further up the hills and away from the local buzz. Earplugs solved this problem for me and the apartment has blackout shutters for a sound night's sleep. Great shower and kitchen facilities.
Would definitely stay again.