I don't think the two arc seasons are the problem. To me the main problem is the writer's disregard for character development in the way they keep falling back on character crutches like Regina's evil ways coming and going without consequence or even comment and Rumple always going back to darkness even after several reasonably successful redemption plots. All I really want is consistency! If they had a decent continuity person who would speak up and say, 'um Belle's been knocked out or put to sleep like 20 times already. Maybe you should try writing something else here?'... And also for Rumple and Belle to get GOOD meaningful NON-REPETITIVE storylines. But the second is more of a personal request. I'm pretty sure ALL the fans would enjoy a little character consistency.
As for the 'small town' comment... hey I'm fine with focusing in on the small town aspects of Storybrooke. I've enjoyed many series set mainly in a small town; Murder She Wrote, Northern Exposure and Hamish Macbeth... to name a few. Big Cities really aren't for me anyway.