I like to make Dali as my base traveling around yunnan? Is this good idea?

Generally, it is fine to set Dali as the base. But as it is relatively far between any two destinations in Yunnan, it would be best to stay in the city or area where you are traveling on that day.

Hi. I'm an American living in DL. Most of the good stuff in Yunnan is in its western side, so DL is nicely situated. Aside from its own virtues, which are great, to the north is Lijiang (too commercialized, but try the small town just outside of Lijiang called ShuHe, truly precious, you should live there 3 days), then further north to Leaping Tiger Gorge (terrific! 2 or 3 days at least), and then Shangri-la (beautiful grasslands, but the town itself is very poor, and now the Old Town has burned down). To the south of DL is Xishuangbanna (I haven't been, but it sounds very worthwhile). The best thing about choosing as a base is DL! A great Old Town, quite large, lots of mountain stuff, and things to do around the lake. A week wouldn't be enough if you want to get into it.