Cairns

More expensive than a hostel but as they say with most things you only get what you pay for - http://www.florianaguesthouse.com/
For the nature experience, there are many different tours out of Cairns, of durations from one day to several, with some that will take you to Cape Tribulation and you stay a day or more and book to return as suits you, a couple of full days in the Cape tribulation area a reasonable stay - http://www.capetribbeach.com.au/ , arguably the best value up there, it right at the Cape and they have basic bunkhouses as well as cabins, all completely surrounded by the forest which is close to being a jungle and if you are visiting the loo at night and hear some grunting, could just be a boar, they rather large but shy enough to head for the hills as soon as they know a human is near.
There are several DIY walks in the area, ranging from boardwalks through to climbing Mt Sorrow with all its leaches and lawyer vines, so called because of the hooking you they can do - be wary, and that walk does require a reasonable degree of fitness, there not really a defined track and it's a climbing scramble up a rather steep slope for most of it, about two hours to get up to some rocks up near the top that protrude up through the canopy to get a view of ocean and reefs - take plenty of water if you decide to do it and get a bag of salt to sprinkle inside socks and boots to deter the leaches and if you look down and see some attacking your boots, rather than stop to flick them off, just keep going for here are some areas where they are thick - maybe they have got used to climbers coming along!

On nature, a great half day walk right in Cairns itself is to follow the Kuranda railway line out of town, there being a walkway on the western side for a bit before it meanders via boardwalks through some wetlands and on to the Botanical Gardens, quite compact and stunning, alongside which is the Gondwanaland walk and then an Arts centre with a refurbished WW2 Oil Tank. - http://www.cairns.qld.gov.au/cbg/visit/audio-tours

The Kuranda rail trip too can be quite good, especially with waterfalls flowing well and though Kuranda itself is a touristy destination, their Butterfly enclosure is worth a visit and for the return journey you can book a rail/chair lift combo ticket and glide over the rainforest canopy, there being a couple of stops you can make on the return and view out over the ocean is quite stunning too with outline of some reefs visible.

Another good couple of days can be had over at Fitzroy Island, there being some good island walks including one up to the summit from where you can get some good views too, used to be katak/snorkelling trips around the island too, maybe still running and a small channel between Fitzroy Island and Little Fitzy at NE end is good for snorkelling.

For the inexpensive eating seeing as inexpensive and restaurants do not go together so well, for Cairns I'd suggest you just do a stroll along the Esplanade and about the adjacent and parallel streets, over to the Pier complex and Casino and get an idea of what is on offer, there being many eateries along the Esplanade and several pubs in the southern end of the CBD blocks, they usually having good tucker a fair bit cheaper than most restaurants.

There is a large woolworths supermarket in the centre of Cairns where you can get plnety of food. Buy a BBQ chicken and make ups some salads.

Eating out in Cairns can be expensive and not particularly good value for the quality.

I also think you should try and get to Cape Trib for a few days, I would allocate more money to that than other aspects of the trip (apart from the dive of course). Stop for groceries on your way up at Mosman where there are a number of shops including an independent supermarket.

admittedly was a few years ago? however a realy great hostel i stayed at was NJOY great location about 12min walk from rail station which is also major shopping center.

just a tad up the road from NJOY is a HUGE statue of capt cook. pop over to port douglas after the mandatory KURANDA trip.

i went up to cooktown via country roads bus from Cairns, stayed in hostel there ( PAMS place )for a week hindsight has shown it one well worth expense ? as the years have proven looking back. capt cook museum in Cooktown simply a must go to.destination. not going tantamount to going to france and ignoring the eiffel tower. IMO

tourism is major income source for Cairns so Hostel stays pays off in dividends as you provide own meals as you want. all kitchen utensils etc supplied at hostel.

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