If you want a hotel with great food, that is away from everything, 2 hotels come most to my mind:
www.quintadofurao.com (in the east) and www.pousadadosvinhaticos.com in the centre of the island.
From Quinta do Furao there's a great walk to be made (see www.sunflowerbooks.co.uk/madeira.htm ) and others in that area by your car.
Pousada dos Vinhaticos has a great view but walks not right from the hotel but higher up from Encumeada pass.
Another one further west is www.hotelpicodaurze.com , but the 2 restaurants are nothing special. But with a car you could do a tour to all 3 hotels.
Another one with good food and great location is
www.eiradoserrado.com but I would not stay there for a whole week.
I have been in all 4 hotels and all have something special to recommend it for.
All of these hotels usually have always rooms available, without reservation, except when a large group has booked it but that will be rare.