When in Mahabaleshwar the thing to is to enjoy the lovely views at the many viewpoints around.
You can easily walk to the nearest points and rent a taxi to the others.
We went to:
Bombay Point (Sunset Point)
Elephant's head Point/Elphinstone point
The small Venna Lake about 4km from Mahableshwar has boating and fishing facilities
Very cheap boating charges - Rs 60 (~1.5 USD) for half hour
Mahabaleshwar is famous for its amazing variety of berries, which you can buy fresh (in season) or in juice, ice cream, sauces, and 'creams'.