Well while Saugerties has seen gentrification, I don't mean to say it would be a bad place to bring up a family. Obviously a lot of people think it is because it keeps growing and the schools are pretty good. It's just a semi-suburban situation now with 'rural flavor.' It isn't that 'real country' upstate NY town that it was when I was a kid. For that I guess you need to go further into Upstate NY. The catch-22 is that the areas that are rural and unchanged also tend to be more economically depressed.
I'm not sure about jobs in Saugerties. Obviously people are making money, but IBM shut down in Kingston years ago and there isn't any big employer like that. IBM still employs many people in Poughkeepsie and Fishkill and probably people commute down there. Some commute up to state jobs in Albany. You have the school district and county and municipal jobs. I think its more of a service economy, tourist economy, etc. Smaller companies exist and some people telecommute from home on their computers and maybe go into the city or northern NJ a few days a week etc. It's certainly better than further north and west in NY and like I said the town looks more affluent.
The Winston Farm hosted Woodstock94 in that year. I just assumed that everyone knew that. 350,000 people came and that was a lot of fun. I went for the three days and I paid ...unlike many that crashed the gates. I'm thinking that a lot of those people that were lets say 16-30 years old then may have remembered Saugerties and came back to check it out later.
Cantine Field must have already had a lot of ball fields in the 80s, but they have more now....and it expanded north up Washington Ave. toward the old golf club house. Then you have a mini golf course, go-carts track and batting cages etc. After that (extending to Mike Krout Road intersection), you have a large parking lot and area for RVs to handle the Horses in the Sun (HITS) horse show people. On the right side of Washington Avenue you have the high school and then the HITS facility (on the old golf course lands). Given the proximity to HITS, a number of properties have been bought up on the roads around there (Peoples Road, Sparling Road, etc.) and small horse farms have popped up...people wanting to be right near the show grounds. so on the one hand you have more subdivisions, but you also have people snapping up several acre parcels and putting some horses on them.
Woodstock: The Bear Cafe is still there...looks the same as far as I can tell.... The Tinker Street Cafe is long gone and there is a photography place there now. The Woodstock Playhouse burnt to the ground and stood vacant for years, but then was rebuilt. Woodstock was always gentrified and upscale and hasn't changed much. Restaurants come and go, but the hamlet area would be easily recognizeable.
You want a classic upstate feel yet ..try like Schoharie County...Middleburgh
and Schoharie are nice. But where do you work in Schoharie County?
Actually you could commute into the Albany area as more are doing from there....but will that ruin their rural idyll?...maybe one day but it's still very countryish out there. I live near Duanesburg in western Schenectady County and often drive west into Schoharie to be in the real country. Duanesburg is on the edge of the suburbs (still quite rural, but transitioning). As you go further west from here you find lots of farmland and it is classic upstate. I like to drive along US-20 in the fall and look at the leaves, stop at yard sales and pick up a pumpkin at a roadside farm stand.
I think the Capital District has a healthier economy because it has the endless supply of good paying state jobs and some success recently in hi-tech firms (google international sematech or albany nanotech). So somewhere on the periphery of the Albany area where its still classic upstate small town, but close enough to drive in to a job. That is my best suggestion. The populated areas around Albany are very suburban so you'd have to put up with a commute to get your ideal rural situation.
Many others on this BB may have other suggestions regarding Upstate areas. See the many threads.