The city is absolutely charming. It reminds me of a Spanish city, especially the Cathedral de la Inmaculada Concepción is worth visiting.
From Cuenca you can hitchhike or take a bus to the Cajas National Park. When I came back to Cuenca I had terrifying altitude sickness.
Before you get on a hike you have to be clear about the difficulty level you can bear, since there are loads of paths you could take. However all routes are incredible.