Hi Tom I returned from Cavtat on 19th June 2005. We stayed in the next hotel along (and sister hotel) to the Albatros.
We didn't mooch in your hotel but we did hear that although it's a lovely hotel the drinks were expensive.
The Albatros and our hotel are set round the headland from Cavtat, in a beautiful setting but it's very quiet. There are about 3 bar/restaurants outside and that is it.
To get into Cavtat you have to walk around the headland which doesn't have a pavement as such (a white line along the road marks the pedestrian part) and takes about 10 minutes.
Cavtat itself is very pretty with a small harbour and a few bars/restaurants/shops/bank. But to be honest we started to feel it was a little too quiet. There was no-where really to go from here apart from into Dubrovnik on the boat (boat stop outside your hotel also) which takes about 30 mins. Otherwise it's trips with your rep.
We were going to hire a car and explore around and bought a map and guide book. When my husband looked at the map he realised that there is only one road really, and that follows the coast through Dubrovnik and up to Split. The road however is small and winds through the hills and he decided that to get anywhere would take far too long.
Cavtat it seems is more or less at the end of Croatia so really you can only go 'one way'. It's very handy for the airport as it's only about a 10 min drive.
If we go back we have decided to head for Split as it is more central so that we can get out and about.
If your looking to lay in the sun and read your book then Cavtat will be ideal. However if you like to get out and about and explore then IMO it will be too quiet.
Hope this helps.