O Casalinho is one of the better-regarded restaurants in the lower town for traditional Nazaré cooking — caldeirada, bacalhau, and grilled fish done properly without pretension. It is not on the seafront but a couple of streets back, which keeps the atmosphere more local and the prices marginally lower than the prime tourist terrace spots.
The grilled horse mackerel is worth ordering when available; it is the fish most associated with Nazaré's fishing tradition and tastes better here than anywhere else on the coast.