You can clearly see Dunollie Castle and Maiden Island and I think the picture must be taken from roughly where Argyll Square is today.
Hall gives an interesting insight into travel on horseback in the Highlands of Scotland in the first decade of the 19th century and it's worth reproducing his account of his journey to Oban from Fort William. Instead of following the present day A82 road down the east coast of Loch Linnhe to the Ballachulish Bridge (that road hadn't built in 1807, never mind the bridge), Hall followed the military road south east inland to the head of Loch Leven to the Kingshouse Hotel near the head of Glen Coe.
Hall writes "Finding the fort [at Fort William] neither so regular, nor so extensive as Fort George, nor seemingly of any use, except as barracks for soldiers, I bent my course towards Inverary. After a tedious and wearisome journey of more than twenty miles, the greater part of which lay over two mountains, I reached at length, exhausted and in a melancholy mood, the inn called the King's House, situated on the side of a rapid river, issuing out of the dreary and dreadful pass of Glencoe. Here, provisions were as scarce and poor as at the general's hut on Lochness; [Hall is referring here to an inn he had stayed at so called because General Wade of military road fame is supposed to have had it as his base. On his stay, Hall was appalled to find he was eating food prepared by a maid suffering from "the itch".] With the important difference, that, if there was any cause of disgust, as there probably was, I fortunately did not perceive it. It is a miserable and dirty hut; though the landlord has this, with some pasture land, rent free, besides 10l. per annum from government.
"However, I slept soundly, and early in the morning, well refreshed, and in good spirits, proceeded through Glencoe, which is ten miles in length, and whose horrors have often been described, to a small but not uncomfortable inn at the ferry of Ballyhulish. Here, an isolated hill, beautifully rising in a conical form, and verdant to the top, with the waters of Loch Lynn [Loch Linnhe], which on one side wash its base, form a pleasing contrast with the gloomy precipices of Glencoe, and the savage rudeness of the mountains with which it is environed.
"By Appin, Aird, Ardnamurknage, Dunstaffnage, and Dunolly, gentlemen's seats distinguished; some of them by the rude magnificence and frowning defiance of former times; and others, by the elegance and convenience of modern improvement, I arrived at Oban. This flourishing village is situated on the bay of Oban in the sound of Mull, which bay is of a semicircular form, from twelve to fourteen fathoms [20-25 metres] deep, and large enough to contain above five hundred vessels. It has every where good anchorage, and is defended from the fury of the winds by the island of Mull and Kerrera.
The village is rapidly extending itself round the edges of the bay. The houses and gardens, rising above one another on the acclivities that bound the bay, exhibit a picturesque and pleasing appearance. When the custom house, in 1766, was transferred from Fort William to Oban, it consisted only of three or four houses or huts. At present, its population amounts to near seven hundred souls. It has several flourishing manufactures; twenty sloops employed in the fishing and coasting trade; and a ship of three hundred tons in the Baltic trade: such are the effects of natural advantages seized and improved by wise economy.
"An English traveller, equally patriotic and intelligent, and particularly conversant with naval affairs, the late Mr T Newte of Tiverton, recommends Oban, I think by considerations that could not but have weight if they were attended to, as one of the happiest situations in Great Britain for the erection of a royal dock yard and arsenal. Having staid all night at Oban, where I met with some very well informed people, I pursued my route to Bunawe, on the lake of that name, where the Furness company have a house and place for making charcoal; and in the neighbourhood of this place an iron work. Here I rested, and passed the night in a small inn, or alehouse, that formed a perfect contrast with the King's House; a blessing for which travellers are indebted no doubt to the Furness company."
You can read the rest of Hall's account of his travels through Scotland via Google Books.
I don't know about the inn at Bonawe (as it's spelt nowadays) but the Kingshouse Hotel is still in business, catering more nowadays to weary climbers and skiers than travellers.
Picture credit the44mantis
I don't know whether it still gets £10 a year from the government and whether it's still a "miserable and dirty hut", you can judge for yourself from the reviews on Tripadvisor.com.