A lot depends on whether you are renting a car. 4th of July weekend is Waterfront Blues Fest in Portland, so there will be a lot going on. You can absolutely spend a long week in Portland without a car, as long as you stay somewhere downtown or in the Pearl, or even Lloyd Center area. You can take the train to hiking areas or the zoo in Washington Park, spend time at the waterfront for the festival or Saturday market. Eat at unlimited number of food carts and restaurants, and go to bars/clubs downtown. All accessible by walking/bus/train/streetcar/ even tram if you want to visit OHSU med center. If you do get a car, my #1 recommendation is drive out to the gorge. It's less crowded in the morning, but the late evening light really adds texture to the scenery. Take I-5 to the old scenic highway exit (by the factory outlets) and stop off at the Portland Women's Forum Viewpoint for one of the best views in the gorge. Continue to Crown Point and stop in at the Vista House. There are a couple of nice water falls before Multnomah Falls (personal opinion: Bridal Veil takes too long to get to and isn't that scenic). Multnomah Falls is nice, but will probably be impossible to find a parking spot. Horsetail Falls is my go to hike when people visit. Great falls right at the trailhead. Easy hike to upper falls where you can walk behind them (low snowpack this year, so prob not too much flow at the upper falls). Continue on to Oneonta Gorge and hike back to trial head. Then walk back down the road to the Oneonta trail head and wait while someone walks the rest of the way to the car. If you are really up for it, hike the Oneonta Gorge trail itself. You will get wet, but it is unforgettable. If you are interested, I can give my opinion on stuff to do at the coast, including my favorite beaches and salmon jerky stands. But seriously, you don't need a car. If you are staying downtown don't get one. Take train to and from the airport.
Hike Multnomah Falls trail. Horsebrass Pub is good. They even have lots of good California beers on tap after you get tired of the wildly overrated Oregon beer. Pine State Biscuits - (maybe not for vegetarians, but for everyone else) Powell's book store is a freaking zoo. The Portland Farmer's market is pretty cool. Lots of cool art on display. Probably even good vegetarian food options.
Guys, thank you so much for all the great suggestions! I'll rep all of you when I get a minute. We're gonna be staying in downtown, but we'll also be renting a car, so we're pretty much open to anything. I'll have to tell her about Voodoo since that was one of the things on her list.
Go to voodoo just to say you did. If you want the best donut Portland has to offer go to Blue Star as I mentioned earlier.
Cool. Sounds like a plan. Any suggestions on when the best time of day would be to drive down to the gorge?
Any time aside from morning rush hour which is around 8-930 and evening rush hour which is from 4-6:30. Anything before, in between and after should be fine. It shouldn't be too bad once you get a bit away from the city it should be pretty clear driving.