Nuremberg.
Beautiful walled old town - all cobbled streets, specialist shops, no cars and so on. It has probably the best Christmas fairs in Germany.
Smaller, friendlier than Munich.
Has history, if you want it - Nuremberg Trials. Also has an airport, decent metro system and is pretty awesome.
Also, it's in the next-door state of Baden-Württemberg, but you might like to try Lake Constance (Bodensee). Beautiful lakeside holiday resort excellent for walking, sight-seeing, day trips to Switzerland. Not flashy or gaudy, but calming, relaxing and very pretty.