On our current world, we've found a small island nestled between two land masses. The island is half black forest, half plains. Small enough to cover with spawn blocking elements, yet large enough for local farm plots for both plains/regular crops. We've always just farmed locally the regular crops, and set up a barley/flax farm via teleporter.

AND.... the distance between the island and land masses is just right for building a couple of stone bridges.

Lovely spot, and just right for building a base, which we have just started! It'll be our first island base. Though we have found quite a few islands that would have also been great places, this'll be our first one to build something 'permanent'.

Spend some time exploring. All the generated worlds we've ever played have had some stunning building locations, but it may take a while to find the perfect spot.