Everything happens in paraty at the historic center... and it is tiny! Just about 20 blocks or so. Car and motos are not allowed in there. So, you can only circule by food, bikes or horses.
The reason this happens is to preserve the stone streets build by slaves in 1820.
Don't be lazy and walk around a bit. It is worth it.
If you stay at the Pousada Porto Imperial Inn you can reserve a "horse and buggy" trip around the Historic Center. We actually used ours to take us back to the bus station when we left.