Your two choices are to:
1/ Live in the City itself.
2/ Live outside the City in the suburbs or Northern Beaches.
1/ Most people who live in the city tend to live in an apartment and mainly walk around town. The car doesn't get a huge amount of day-to-day use. I live in town due to proximity to work.
2/ As far as the suburbs go, the only "suburb" that I would live in would be Bayview Heights - quite nice. I would steer clear of the southern suburbs, as the road into town is slow and congested at the best of times.
Redlynch, Freshwater etc are nice, but having spent some time there, it's still a trek into town and you get pretty cosy with the flies too.
If not living in the city, the Northern Beaches are the way of the future. But it's not necessary to live all the way out at Palm Cove, as nice as it is. Clifton Beach is one closer to Cairns and more "residential", whereas Palm Cove is very "touristy".
Machan's and Holloways are close to town, very nice, affordable, but under the approach path (which you may or may not like). (That said, when I lived in the city in North Cairns right under the southern approach path, you could clearly make out all the inner workings of the landing gear during the summer season....that was pretty darn close to the end of the runway).
Personally, I would chose Trinity Park or Smithfield (beach side of highway, near Campus Village), perfect distance to town, balance of affordability and general amenity).
The drive in from the Northern Beaches is fine (particularly if not going all the way to Clifton/Palm Cove), and peak hour is not so bad from the beaches.
You know you have been in Cairns too long when you start getting frustrated at "Cairns Peak Hour".
Hope that helps - happy for you to PM me if you have more questions.