Lijiang has to be one of the nicest small cities in China. It is true that there has been an increase in tourism there, but you can escape from the tourists easily enough by escaping down some of the backstreets (which are more interesting anyway). The architecture of the city is great and the Naxi people carry on with their lives just as they have been for centuries. You should absolutely trek Tiger Leaping Gorge, very near Lijiang. The trek runs through the gorge created by Yulongshueshan (5500+ meters) and offers great views of the Yangtze river at its wildest. It can be tackled by a moderately fit person in two days. In the Fall there is an explosion of spiders along the trail. We had to walk by (and sometimes under!) huge webs with dozens of beautiful orange and green spiders in them, which was a bit unnerving, but wonderful at the same time.