Are there any coffee shops in Ephraim now?
I'd say it depends on what you mean by a coffee shop. Do you mean you've got to have a specific type of fancy latte (like my daughter), that's one thing. Or do you mean a place to have a casual meal? I haven't been to Leroy's, but it's listed on TA and gets good reviews. Also, sometimes places say Ephraim or Fish Creek and they're between the two. We've stayed at Sommerset Inn and their address is Ephraim, but they're a bit north of Ephraim center and a few yards from Sister Bay shops and restaurants.
We'd like to be able to walk into town from our cottage in the morning for a cup of coffee.
I think Leroy's is open again, that would be it as far as I know.
Consider looking up the cottage on Google with the satellite, or even the other version and see if walking is an option. People do walk along the roads, but be very careful, there aren't a lot of sidewalks as this is generally a rural area. Some roads have broader shoulders than others, and some areas have side-walks, but not everywhere.