Baga is approx 2 miles (max) walk from MD along the Baga River. It's a nice walk and has protection from sun. There is avery good German cafe en route - Lila Cafe which does great lunch/breakfast... very clean and efficient.... it's run by a German couple who stay in Goa, Goan staff. Good place if you have a dodgy stomach and want good assurance of quality simple food.
If you like walking. Walk from Baga to Calangute another 2 miles. You will see more than most tourists if you do this and meet the locals. If you get tired hail a taxi, loads of them.
If you want to walk the other way (before you cross the metal ridge that is 200m from Baga) head straight on and up the coast to Anjuna, a bit rocky but nice.
Around MD. Good quality of air and lot's of birds to spot if you like that sort of thing.
Haven't stayed in MD but I imagine it's very good. A lot of people eat there I think. Not my sort of place but I'm sure it's good.
I like to eat away from hotels.