I just left Melbourne and I'm happy where I am right now, but I also miss it. There are so many great things about that city. And if you live in a good location you really don't need a car, I never drove for the 10+ years I spent there. I didn't cycle, but I walked and took public transport everywhere.
I'm not super familiar with St Kilda but the few times I have been, it was pretty nice. As it is a developed inner-city suburb, you should have all the necessary amenities within short distance, plus the fun stuff as well. Your two closest major markets will be Prahran Market and South Melbourne Market. Out of the two, South Melbourne Market is the cheaper one, from my experience. And there are usually bargains if you buy your produce just before they close. For supermarkets, Aldi is probably the best value, and there is probably one close to you.
Anyway I hope you enjoy Melbourne! :)