I love this movie too. I associate it with many happy memories (including being in Hawaii in the 60s and doing all those touristy things, as my Dad worked for an airline). It is easily my favourite "Elvis"-film, and probably the quintessential teen-idol film (a much copied and parodied format) and Hawaii travelogue film.
Blue Hawaii is a feel-good film. It makes me feel good. And I hate to burst anyone's happy bubble, but it is what it is. I judge films in the context of their time (like many Hitchcock films or Gone With the Wind which reflected the society/time they were made). This being said, I will only mention that, yes, Blue Hawaii does have a few cringe-worthy elements in it in the area of race relations/stereotypes, and things that might be considered politically incorrect nowadays.
I think what the target audience was at the time that it was made. Perhaps, white middle class American couples with families who wanted some weekend light entertainment. It had that slight bit of harmless "teen" rebellion which was still nascent in '61 and of course Elvis to appeal to the young crowd.
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