Raro is awesome! One of the great things about it is there's lots of beaches from which to choose. Most of the tourist promos feature the Muri area (SE coast), where the lagoon is deep and wide and there are several motu (islets) to explore. But any accommodation that is right on the beach will be pricey ($300 a night or more) if it's on a nice beach). If you're willing to stay across the road from the beach or on a part of the lagoon that's not got a lovely beach you will save a lot of money. If you're willing to hire a car you can stay wherever and drive everywhere. There's also 2 buses (clockwise and anticlockwise).
On balance, the Muri area has a couple of wee markets, several restaurants, and nice beaches. The SW coast is nice too--around where the Rarotongan Resort is--and the snorkelling on the SW is the best.