Just came back from Cuenca. Cuenca it is a beautiful city, You will enjoy it a lot.
Hotel: Casa del aguila, very nice, walking distance to plaza calderon and restaurants, extremely clean. I would stay again fo sure.
Food: If you are going to Cuenca, you must go to Tiestos, it is one of the best restaurants I have ever been. Be sure you make reservation
Transportation: We use Vanservices and did not have problems