Varkala is split more or less from the North Cliff and the South Cliff with just a couple of hotels closer on the beach because its just impractical to be on the beach because you immediately run into the cliffs! There is a part that kind of eases down between the North and South Cliffs but there isn't much room there.
We stayed in the North Cliff area and was a short walk to the main footpath that had the cliff, then the beach on one side, the shops, hotels and the restaurants on your other side.
One of the first restaurants on the path and the first one we stopped into was the Coffee Temple and immediately became one of our favorite spots.
Here is pictures from our first day there, including the interior of our room. Shots from the Coffee Temple. Some beach shots and me getting close to the water.