As popular as it is, Miyajima is far from overrated. If you are planning to come to the Hiroshima area, you really shouldn't miss out on a day on Miyajima island. The whole island has been treated as a sacred place since ancient times, so much so that the most prominent Itsukushima shrine was built floating next to the land, not built on it.
This island has long been considered one of the top three scenic spots in all of Japan and boasts more tourists each year than Disneyland.
As you travel to the island by ferry, you see the island and soon after noticing the huge red Tori gate in the water in front of Itsukushima. The Tori and floating shrine, as well as many of the other temples, shrines and pagodas on the island, are said to be in their original state from the Heian period. Next to the floating shrine up the hill to the left is a 5 storied pagoda and if you walk up the hill you will find the large wooden Toyokuni shrine.
If you walk behind Itsukushima, you will find the huge staircase leading up the the famous Buddist temple Daisho-in. If you walk up the stairs to the temple, past the prayer wheels, you will see many interesting statues of priests who have served at the temple (no two are the same). This is also the place for the religious ceremony called Hiwatarishiki (April and November) where participants walk over the hot coals in efforts to reach enlightenment.
On the opposite side of the floating shrine, you will find the smaller Daiganji temple with interesting statues, trinkets and sometimes performances take place here. If you continue through the neighborhood streets behind Daiganji, you will find the Miyajima aquarium.
Wandering along the back streets lined with souvenir shops, hotels and small shops is very pleasant. If you follow the main street behind Itsukushima, up past the fire station, you are on your way to the island's most scenic park. This park is full of Momiji maple leaf trees- especially beautiful in fall when the leaves burst with color or in Spring when the park is light pink with cherry blossoms.
Walk through the park and head up the hill toward Mt.Misen on foot if you want a nice hour hike, or skip the steps and take the cable car to the top of the mountain. There are stunning views from the top of Mt.Misen on a clear day. From here, you can see the surrounding islands dotted in the Seto-inland sea that surrounds Hiroshima. On New Year's first sunrise, you will find a good size group waiting for the first light of the new year on top of this mountain.
If you have more time, you can drive, take a bus or taxi or ride a rented bicycle along the coast to the main beach Tsutsumigaura. In the warmer months, this is a popular beach for swimming, sunbathing and water sports. There are also cabins for rent and a pleasant, shady campsite. This is the location of the annual Sundance international music and dance event held in August. While Seto-Naikai beaches aren't going to win any international awards, Tsutsumigaura is one of the better beaches in the area.
Throughout the year, there are many other festivals and events held on the island, but there is always something interesting to see no matter when you visit. Popular souvenirs from the island are Momiji-manji cakes, in the shape of maple leaves, filled with sweet bean paste, chocolate, custard, cheese and more. Shakushi Rice paddles are also famous "lucky" symbols of the island, in fact you can see a huge one on display next to the post office in the center of the covered shopping street.
Miyajima is also one of the top producers of oysters for the entire country. There is a big oyster festival held in February, but you can see them served up in a variety of ways in eateries in town all year.
There are many great places to stay on the island which offer spectacular food, great views, Japanese style baths in peaceful surroundings. One of the benefits of staying on the island is being able to see the famous sights and stunning views of the island without many other people around. It can be a very romantic, meditative experience.
There are many visitors who instead enjoy daytrips to the island, as lodging is fairly expensive and there are limited things to do on the island after dark. If you are interested in Miyajima, but want to keep your options open, perhaps spend the whole day from early morning until sunset to get all the spectacular views and charm of the island.