This nails it pretty good.
I spent years, and I do mean years in Arizona.
One of my sisters had a place in Sedona. The place really is just for the tourists now. If you don't have plans to open up a gift shop, trendy southwest restaurant, sell timeshares or work in the hospitality industry, stay away. Definitely one of those "nice place to vist but I wouldn't want to live there" towns.
I don't care much for Flagstaff either. It can look and feel real dirty. If you're into truck stops, freight trains, and and fast food restaurants, then Flag is the place for you.
Still, it would be my choice over Sedona.
However, if I was going to pick a place in northern Arizona, I would rather live in Prescott or even Payson. Better climate over all and closer to Phoenix.
Have you considered the southeast?