Over the years that I have done business around China, I also had the pleasure of visiting a lot of unique and photogenic places. The water towns around the Shanghai, Suzhou and Hangzhou areas were some of my favorite photography subjects. Although many of these villages have since been commercialized into horrific tourist traps, there are still some hidden gems here and there. There are 8 famous water towns near Shanghai in total but I will only cover the five towns I have been to personally and provide my own photos for reference.
I'm too lazy to write a detailed recollection of the places, there's plenty of info online if you are interested. I will however, briefly describe my impression of each one.
Nanxun 南浔 - My personal favorite, least commercialized and well preserved.
Nanxun District (Chinese: 南浔区; pinyin: Nánxún Qū) is a district in the prefecture-level city of Huzhou, Zhejiang province, China. Nanxun Town (南浔镇), an old town, is located in the district. It is one of the most well-preserved old towns in this region and is known for its cultural heritage. Other towns in the district include Shuanglin, Lianshi, Linghu, Shanlian, Qianjin and Shicong. 
Zhujiajiao 朱家角 - One of the closest water towns to Shanghai but overly commercialized. My photos are from 2012 so it may be a bit outdated.
“Zhujiajiao (Chinese: 朱家角; pinyin: Zhūjiājiǎo; literally: "Zhu Family Corner") is an ancient town located in the Qingpu District of Shanghai. The population of Zhujiajiao is 60,000.
Zhujiajiao is a water town on the outskirts of Shanghai, and was established about 1,700 years ago. Archaeological findings dating back 5,000 years have also been found. 36 stone bridges and numerous rivers line Zhujiajiao, and many ancient buildings still line the riverbanks today.”
Xitang 西塘 - Well preserved and not overly commercialized, but I may be outdated as the last time I went was back in 2012.
"Xitang (Chinese: 西塘; pinyin: Xītáng) is an ancient scenic town in Jiashan County, Zhejiang Province, China. Its history dates back to at least the Spring and Autumn period when it was located at the border of the State of Yue and Wu.
Xitang is a water town crisscrossed by nine rivers. The town stretches across eight sections, linked by old-fashioned stone bridges. In the older parts of town, the buildings are set along the banks of the canals, which serve as the main transportation thoroughfares in the area.
Xitang also contains numerous antique residences and temples, such as the Temple of the Seven Masters. The town keeps a tranquil ambience and scenic beauty, making it a very popular tourist attraction. It is frequently depicted in Chinese landscape painting.
Xitang locations were featured in the final sequences of the motion picture Mission: Impossible III."
Qibao 七宝 - I went there taking friends for photography and didn't really manage to take any decent photos myself. Impressions of the place was pretty bad, most of the older structures have been destroyed or are in poor shape. Not overly photogenic as there weren't many bridges, temples or nicer structures there.
"Qibao (simplified Chinese: 七宝镇; traditional Chinese: 七寶鎮; pinyin: Qībǎo Zhèn; literally: "Seven Treasures Town"; Shanghainese: tshih4pau2) is a town in Minhang District, Shanghai. Its formation can be traced back to the Five Dynasties and Ten Kingdoms period, to the Northern Song Dynasty. The name comes from the local temple, "Qibao Temple". Today, Qibao is a tourist attraction, in the area known as Qibao Old Town by the Puhui River with traditional Chinese architecture and a number of attractions, including museums and street food."