Typical street in the old city

As mentioned, Gamla Stan is the island on which the Royal Palace is located, the soul of the city one may say. Land was scarce around the Castle and other governmental, religious and military buildings thus the buildings tend to be very closed together having as a result this particular narrow streets.

Towards Fatbursparken

When you come out Stockholms södra station you have the option to walk North, towards Medborgarplatsen, and pass through Fatbursparken. It's a very nice urban park where you could have a nice picknick/lunch on the grass or under the trees shadows.