If you are not a fan of the busy-ness and excitement of Kenting, Hengchun is not a bad option. I personally find Kenting to be full of kitsch and tack. Most restaurants are some kind of western or Thai. There's a night market every night, and unless you're there for the market, it's a pain to pass through. Hengchun on the other hand seems to be a bit more grounded. It's not big, and there's not much to see, but there's plenty of old architecture and a few quaint old streets, and at night you can take a look at Chuhuo or the occasional night market. The food is great for someone like me who's a vegetarian. There are far more choices for vegetarians in Hengchun than in Kenting. The location isn't bad either. It's less noisy and bustling during the day and even some nights. It's not bad starting point for the round the peninsula trip either because you can either head towards Kenting or avoid it altogether and just zip straight towards the west coast which has incredible views.
You cannot expect for visiting another Forbidden City here however you may appreciate seeing a well-maintained authentic and still useful old town on the very south end of the peninsula. I guess for most Chinese originated folks from whichever region, it feels like home: the bricks and the fences define what's inside and outside, just like one should have a clear boundary about everything. You may just take a walk around the old town and discover traces from the movie while enjoying local food a little bit.
Instead of saying what I like or dislike, I prefer to give tips.. *Free admission. *It will be good to have the company of a good local tour guide who will tell you more. *There is a night market inside the Old Town on one of the Sundays, very different from those commonly found in Taipei or other very well-known markets. Hence, it's good to have a tour guide to find out when it comes. * You can find many interesting shops within Old Town so don't think it's ancient and you can only see wall remains.