Up until last year I owned a Bed & Breakfast in Key West. My favorite dive shop there is Southpoint Divers... http://www.southpointdivers.com/
Key West doesn't have the best diving in the Keys, but certainly the best top-side attractions: restaurants, museums, theatre, and incredible night life. I don't suggest staying at a resort, but one of many small Inns or B&B's which exude the real charm of Key West. If you are interested, feel free to e-mail me for suggestions...I'd be happy to help out. Or check out the web site of the Key West Innkeepers Association... http://www.keywestinns.com/
From KW you can easily take day trips up the Keys for better diving: healthier reefs and better wrecks. Have fun!