I'm working on a campaign setting that takes place on an island that is a good distance from the mainland. The features of this island are as follows

Once the location of a very powerful and magically advanced civilization that collapsed 1000 years ago (typical)

The island is shrouded in a necromantic aura that heals undead and raises anything that dies in it. This aura extends out 1000 feet from the island but doesn't extend below the surface.

There is a small bubble of land located on an island that is free of this aura.

A town was established inside this safe zone and the main export is loot excavated from the ruins.

The ruins are swarming with basic undead, but due to the aura they can't be actually destroyed, only put down for a short time before they reconstitute.

I'm placing the Mad Dungeon under this island.

What I need help with, is interesting quirks that a town established on this island would have. They have no land for agriculture and are essentially a outpost for black market looters. I'm suffering from a bit of writers block for this and would love some creative ideas to try out.

Interesting premise.  Maybe a few questions will help clear the block.

1) how did people find out about this town.  Did someone "escape" once and and somehow take a ship back to mainland, and the legend began?

2) how does this town trade its goods (ie items from ruins),  do ships dock in a harbor and send out a signal?  did they build a tunnel  to a beach or side  of a cliff where ropes can be lowered to lower and haul goods.   I like the idea of a tunnel in the middle of a cliff with ropes on either side that they then use to get goods in and out.

3) How big is the town?  if it's that isolated everyone will know everyone else, and some folks may not all get along, or at least have different ideas as to what they should be doing.

4) How long does it take the undead to respawn?  is it at the same time every day, or some number of hours after they "die".  Is this variable based on some other factor? moon/magic energy ebbs and flows etc/how many died at once.

5) What caused the bubble? is it the last remnant of the old civilization,  how stable is it, or can it be deteriorating?

They might utilize the undead for some things, for example, lure a zombie into a hamster wheel-like contraption, and keep it moving with the promise of flesh. The infinitely turning wheel could then be used for something productive, like turning a mill or something. Just a idea.

If it's a black market outpost, think about how they treat security. Society doesn't work without rules, no matter what anarchists might say (if there are no rules, it's not society), so how do they make sure those rules are followed? Is there a collaborative effort to police the area? Is there some guild who does it? Or is there maybe a particularly strong guild or mob boss who oversees operations?

Great replies!

The bubble was discovered by some pirates about 20 years ago. 

Bubble is due to an artifact to a god that still stands. 

Undead revive in a matter of minutes to hours depending on how they are destroyed. 

The town remains in the zone itself, ghosts roam and are the largest threat. 

No undead can enter the bubble, they are repelled by it but not destroyed. Undead dragged into it would attempt to flee constantly and eventually batter themselves in attempts to leave. 

Relics recovered are shipped out to see via a fast flowing river that the bubble is located next too. It is a dangerous journey. About a mile off shore a floating dock has been established as a way point for collection and exchange of goods. 

I love the idea of using the undead as hamsters. Perhaps a power house established outside the zone. It would be extremely dangerous and would need to be autonomous in some way. 

Love the idea for the town/island/zone, the whole thing. :D Am adding it to my list of things to steal. 

Stream of consciousness ideas that are coming to me include:

• There's an 'underground' of mostly youths in the town who get their kicks from eating pieces of the undead. Or rolling them up and smoking them. They get a little bit high, a little bit 'dark', and they 'see a connection to the afterlife'. Whether or not this has potential side-effects that are going to become really bad is another matter. Maybe this is all it is. But maybe, if you consume too much, you can get turned into a higher undead.
• There's a librarian/researcher/wizard who has been carefully measuring the safety zone for decades--he places stakes around the town, and he uses chained up undead to determine whether the zone is staying the same or growing/shrinking. He kills an undead, locks it in a small cage, places the cage just inside the marker, and waits to see if it is healed. Then slowly moves it out of the zone to test where the 'line' is. And maybe the zone has been shrinking lately, but the classic 'no one believes him'. Or the zone is staying the same size but slowly moving.
• Someone is keeping her slain and now undead husband chained in her basement, because she couldn't bear to let him go. He was killed outside of the zone when he tried to save a neighbor's child who had wandered out of the zone. 
• The zone is moving. It's common knowledge. Over the course of the last decade, the zone, and therefore the town, has moved a half mile. They keep abandoning or tearing down buildings that start sliding out of the zone, and rebuilding them on the leading edge. Everyone is worried, as they have maybe 5 more years before they reach the edge of the island. Will the zone stop moving? Or keep going, and they'll have to abandon the island? Why is it moving? Can they stop it?
• 'Capital Punishment' in the village is to brand you or tattoo you as a criminal, then kill you and dump your body outside the zone. So the area surrounding the village has undead tattooed/branded former criminals that serve as warning signs to anyone else. 
• Someone has dug a smuggling tunnel from the shore/docks into the village. Or maybe that's the main way that people get to and from the village, so they don't have to go up through the woods where the undead are. But of course at some point that tunnel system will get compromised. 
• A party of searchers found Thing of Value in the ruins. The Thing requires a key to access or use it or get into it (maybe it's a secret room). But the key is around the neck of one of their party members who died in the ruins when they found it. So now the remains of that party are looking for people to help them track down one particular undead so they can get the key.
• Sometimes, the people who die turn into more dangerous undead. Low level vampires, maybe. They only have intelligence when they are outside of the zone, so they don't go into town (where they just become mindless brutes), but they try to lure people out into the woods and out of the safe zone. And they are also trying to find out what causes the safe zone, so they can destroy it and enter the town and kill everyone.