Our intention was to go to Punta del Este, but being high season we realized that it would be super crowded plus the prices were very high. Instead we decided to get closer to Argentina and stay for 2 nights in Colonia de Sacramento.
"Founded by the Portuguese in 1680 on the Rio de la Plata, the city was of strategic importance in resisting the Spanish. After being disputed for a century, it was finally lost by its founders. The well-preserved urban landscape illustrates the successful fusion of the Portuguese, Spanish and post-colonial styles." (Source)