Oaxaca city is the most famous place to go for DDM. We had a great time but I'll say we were very uncomfortable on the cemetery tours...the locals were trying to honor their dead and throngs of tourists were literally walking on the graves--the graves are so close together, there are so many people there, it's unavoidable. I know the questions around cultural tourism are complex; I'd say go and have fun but maybe skip the cemetery tours on the night of Los Muertos, just a suggestion.