I spent a month there in 2013. You can wade the San Juan from city limit to city limit. A few miles east of town on the 160 take the East Fork road along the river for some nice rainbow fishing. South on the 84 several miles is Echo canyon reservoir. There are rainbows, largemouth bass, green perch and bluegill. The Piedra river northwest of town was a lot of fun for the cutthroats. To get to it take Piedra road right off west hiway 160 . (It's where Fred Harman AKA Red Ryder park is) It's a long drive on a maintained county gravel road. You will pass Hatcher Lake. It's a private lake and can only be used by residents of that HOA. Farther up that same road and past the Piedra River is Williams Creek reservoir. If you go there you can hike over past the dam on the south end and down the spillway to Williams Creek. There you can wade the creek for quite a ways. Or you can just fish the reservoir. There are two fly shops that I know of in Pagosa. Let it fly and wolf creek anglers.
Two chicks and a hippie is a great sandwich/coffee shop. Boss Hoggs was the best steak I had and there are a number of really good barbeque places. Have fun there. It's a really great little town. Jim