Hey there,
it wont really matter where your stay since shops form kecil (small) as well as besa (a little less small

go to all dive sites. The distances are very short (which i really enjoyed) and most operate with small boats and go back to the shop in between dives.
Where to stay depends of course on your budget and if you want to have some nighlife or not. On the small island there are some resorts in secluded bays, Long beach has some nightlife and coral bay is quiet after 8 pm.
On coral bay are 2 middle to high end resorts. One calles sharila the other ones name i forgot.
For diving, especially if you are advanced and/ or bring your own gear you might want to consider a small operator. I dove with angel divers (coral bay, kecil) a very relaxed and extremely friendly shop with unbeatable prices ( was around 50 ringit for dive if i remember it right). the nice thing was you could really say where you wanna go and they organized it.
Maybe other/ bigger shops are that flexible as well, but i doubt it. Only 'downside' is that the shop is really basic, There is not really anything to sit on inside but than again, all we really did there was pack the gear, have a very good briefing and hop on a boat.
Regarding watercolors, i did not dove with them but heard very good things about them, they should be open by now since season is slowly starting over there.
Hope i could help out and maybe see you on the islands
