Can someone provide insight? I'm confused as to which area is best to stay in.
My husband and I like to stay in areas that are cool, non touristy, that have plenty of cafe's, good nightlife (i.e. small clubs or lounges that play house music-not hip hop), and a general sensibility to organic/yoga lifestyle- but not pretentious. We like to walk so being near the sights is not as important as getting a flavor for how the city really is- but it can't be too far that we have to take taxis/metro everywhere.
Based on my research, it seems like Raval might be too young and seedy?, Born might be trying to hard and pretentious? and Gracia might be too old and quiet? Or am i totally wrong on all?

Any insight would be appreciated. Also, if you do recommend an area, any recommendations for a cheap hostal, pension or hotel there?

I would recommend you to stay in Gracia or Barceloneta neighbourhoods. Both have a great daily market for fresh foods and lots of little stores for various needs.

Gracia is an attractive barrio with narrow streets and small squares, popular with young expats but not touristy and a bit bohemian. There are lots of cinemas, theatres and restaurants.

Barceloneta is a fantastic place 2mins from the beach and a lovely 10-15 min walk to Las Ramblas. Bear in mind that you are living amongst the locals in converted fishermans dwellings with people going about their daily business. There are lots of seafood restaurants and tapas bar and you can enjoy clubs and lounges in Pº Maritimo de la Barceloneta, Borne area or Gothinc quarter.

Have fun!