What area is the best to live in HK depends a lot on your family type (with children, pets etc) and your personal preferences. A lot of families with children live in Discovery Bay which is a boat ride (around 30 minutes) away from HK Central, also Ma Wan is popular among families. These are both on islands away from central offering a little bit calmer place to relax.
Finding a place withouth super-dense housing is quite impossible, usually it is less dense on islands which are more far from the central. On Kowloon side and HK side it is almost impossible to find this kind of place (may be Sai Kung on Kowloon side).