I love Seattle's Greenwood neighborhood. With a bar called The Angry Beaver, my favorite yarn shop called The Fiber Gallery, The Greenwood Space Travel Supply Company (the funds of which go to a non-profit tutoring center for kids), and Chocolati chocolate cafe... what's not to love!? The neighborhood suffered a tragedy last year, but it has mostly recovered.
Another neat spot in Greenwood is Seattle Recreative. This is a non-profit shop that receives donations of craft supplies and resells them. They use the profits from the sales to fund art programs. This place is so fun to browse; it is full of little treasures! As a teacher, it seems to me to be the ultimate representation of the phrase "I could totally use this for a class project someday!" They even have a yarn stash. Check it out!