Everyone should take a drive to Williams Lake and have a picnic. The scenery is beautiful. It is a great place to walk along the lake, go fishing, or just enjoy the views.
For those that may be more adventurous I would suggest the Williams Creek Trail.
We didn't spend much time in Pagosa Springs. However, we did enjoy a nice walk along the river with views of the mountains and the hot springs at the Pagosa Springs Resort. We also visited the Visitor Center which is located right next to the Pagosa Springs Spa & Resort. I bought a couple of postcards and chatted with the friendly locals who worked there.
Pagosa Springs is full of back country hiking, with many waterfalls. They have some of the most beautiful waterfalls in Colorado and the U.S. Some are easy hikes, some are moderate, and some are difficult. When you get to town, you can pick up a free Pagosa Springs guide at the Chamber of Commerce, and there is a page in it called "Where Ya Hikin'".