Salem

What do you guys think a good location is? Should it be next to a river? What biome should it be in?

1 lakes or ponds work best.
2 more biomes better. 3-4 is wonderful.
3 clay pit, lime pit, mountain, mine entrance, water opening for wells.

It's complicated ^^

That mostly depend on your playstyle and what you want to do.

Water is probably the most important because it is used for a lot of things (some foods , gardening , boiling , sifting for glass/gold , fishing ...)

Biomes are less important in my opinion , because biomes are really split-up it's easy to find nearly everything everywhere. But still depending on what you do you'll have some preference : big lime area for mining ; big desert biomes for snakes ; big spider biome for silk/SpiderEggs/snails ; close to ocean for lobster fishing ; big pine area for turkey stuffing ; lightness or darkness for witch things ; close or distant to statue for PvP ; close or distant from town for easy access I still don't know if this one could be usefull to get husbandry ...

Bjebr

I would place lime at top of that list, If you can find clay near its good if not with lime you can make some clay. Now with lime nerfed in farming its less important than before but still if you planing to make plenty of metal you need a spot near. then water source (well or river) but remember people tend to use river for quick scouting and that might get you spotted quicker. Then biomes, really some biomes got better 7 use inspirationals then the rest and that is quite important.