The Chill Out Bar on the first floor along from Dreams is about the only decent bar in the town. More South East Asian in feel than Spanish, but pretty cool and cheap beers.
Everywhere else in Costa Teguise is like something out of "Pheonix Nights", i.e. stuck in 1982. Wall to wall Karaoke and pop tribute acts. Places with the names "The Red Lion" and "The Black Bull" abound, with most showing Coronation Street and Emmerdale for those who wish they were still in their two up, two down in Rotherham.
"Cayote Disco Pub" is about the only place that could reasonably be described as a Nightclub (or disco, "nightclub" seems to be widely understood as a brothel in Spain - which would be more interesting, frankly), but it's still pretty ropey.
All rather depressing, really.
There are a number of large 4-5 star hotels.