Continue to keep your application settings and other data in the application's install directory. There is no need to change the directory locations just for a "PC only" install.
The solution to file access issues is to change file permissions during install.
For example, this answer someone posted using WIX installer.
A similar question is answered here.
You could use code similar to this to change permissions during install (when the user has admin privileges)
using System.Security.Principal;
public static void SetPermissions()
{
String path = GetPath();
try
{
// Create security idenifier for all users (WorldSid)
SecurityIdentifier sid = new SecurityIdentifier(WellKnownSidType.WorldSid, null);
DirectoryInfo di = new DirectoryInfo(path);
DirectorySecurity ds = di.GetAccessControl();
// add a new file access rule w/ write/modify for all users to the directory security object
ds.AddAccessRule(new FileSystemAccessRule(sid,
FileSystemRights.Write | FileSystemRights.Modify,
InheritanceFlags.ObjectInherit | InheritanceFlags.ContainerInherit, // all sub-dirs to inherit
PropagationFlags.None,
AccessControlType.Allow)); // Turn write and modify on
// Apply the directory security to the directory
di.SetAccessControl(ds);
}
catch (Exception ex)
{
MessageBox.Show(ex.Message);
}
}