This was my choice for most livable small town anywhere! Even better than Jasper, Alberta (and that's saying a lot for me)! 
You're surrounded by the biggest, most beautiful mountains in Europe. The town has everything you need, and the outdoor 
activities list has just about every activity and sport available on earth. Cuteness abounds!

The hostel I stayed in was interesting.  It was recommended by Lonely Planet, and was run perfectly... but nowhere was there any mention of it being a religious retreat.  Not even at reception.  The staff was a little too sweet, but this is Switzerland.  I only started to catch on when I saw little tips, like in the dorm room, there was a "lift your spirits" guide hanging next to the door with a bunch of biblical references... Why it was there, I don't know.  Who get depressed when visiting Interlaken?! Then, every morning at breakfast, there was a new chipper religious pat-on-the-back phrase for the day.  The DVD collection (in their theatre!) was huge, but at least 25% was about Christ in some way. And I never saw anyone use it, but there was a meditation room upstairs.  I have nothing against this religious integration into a hostel, but I did find it unsettling that it wasn't plainly stated, but rather gently encouraged.  Needless to say, this place was the only place I ran into a serious religious nut.  I thought I ditched him, but 2 weeks later, guess who I ran into on the ferry to Copenhavn... Ugh.