Yeah I think they are staying there because it is quiet, it's kinda different with a 2 year old to consider.

My friend has bought (!) a villa in Seminyak, and I think M & L considered renting that, but I gather that is really far out?

I've never actually been, (shocking isn't it? It's so close!) but I think if I did I would either want to go for the really peaceful Ubud experience or stay right in the middle of the action.