I'd rather have three or four interesting towns, even though I'm aware it means a lot more effort ;p
In recent times Zelda games always seem to be a zero-sum game. If Nintendo puts more effort into one part of the game, another one suffers. Having a bunch of interesting towns would probably lead to another part of the gaming being left behind, so I gave up hoping that a Zelda game with different interesting towns will ever happen again (that's a scar left behing by TP, never again ;( ).
Actually, I'm really a fan of the one town concept if done right. Despite being a great and rather packed town, I still think that Nintendo merely scratched Skyloft's potential. I would have loved if the town had more secret areas to explore, more of a (meaningful) backstory and mysteries to discover and more interactions between characters (I imagine something like Xenoblade's affinity chart here -- NPCs that have changing relationships towards each other).