A few years back in 2005, I stayed in "Feng Chun Yuan" in the mountain side of Yilan. Its those type of Ming shu where the home is converted into a hostel of sorts and you are served by the owners. I can see/hear a gorge (I think it might be the gorge you are refering to) and its very near one of the nature trail with fresh spring water flowing 24/7 at 21 degree celsius.
I stayed in 「親河舞舞」民宿 Qin He Wu Wu Homestay when I visited Yilan in 2006. The owner is a very nice 30+ couple. They are simple and warm folks.
Initally when I emailed Mr Wu (吳先生, he requested me to pay him deposit. After explaining that I am from Singapore and unable to wire transfer him the money, he trusted me and waived off the deposit.
He also introduced me and my friends to Su Ao Cold Spring and even drove us there without any extra cost. It is a 30 minutes drive from Yilan. There are only two cold spring in the whole, one in Su Ao, another in Italy.
Actually, the family doesn't stay there. Only when they have guests, the wife/husband will stay there to cook and assist the guests. In a way, visitors can enjoy the whole terrace house to themselves. You can use they bicycles for free too.