Good lord, don't you people know anything? Newcastle is a sprawling city of about a third of a million people, not a small town.
The steel works was shut down years ago, as was much of the other heavy industry. The place now depends on a great diversity of industries.
It has miles of the most glorious beaches in Australia. Caves Beach is beautiful, likewise the Nine Mile Beach stretch from Blacksmiths north toward the city. Then there's the marina life of Nelson Bay and a whole stack of places to the north. (You really need to be a beach lover to appreciate it, though). The campus of the University of Newcastle is very modern and one of the most beautiful you'll find anywhere (exceeded in Australia only by UWA) and there is an active social life. The city backs onto the magnificent Hunter Valley with its vineyards, and you can drive to Sydney in less than two hours these days if you want access to a major metropolis.
Newcastle and Adelaide are both a bit light on for night life, I suppose... well, compared to Sydney. In a way, they are more for families and older people (both have some very nice restaurants etc, especially Adelaide, and they are great places for bringing up kids). Then again, the campuses themselves are big and generate a lot of social activity. Newcastle has a very free and easy style and is extremely friendly because of the beach culture. As a result there is plenty of
available .... Adelaide is slightly more staid and conservative, though the cultures aren't all that different.
All that said, I'd probably choose the University of Adelaide because it is slightly more prestigious than the University of Newcastle ... but it really depends on what discipline want to study in. U. Newcastle is about number nine in prestige in Australia, while U. Adelaide is about number eight. Both are doubtless very strong in particular fields, though not to the extent of U. of Melbourne, U. of Sydney, UNSW, Monash, ANU, UWA and U. of Queensland.
Above all, don't be put off either city by the ignoramuses on this board.