Physical hydrogels based on poly(vinyl alcohol), PVA, have an excellent safety profile and a successful history of biomedical applications. However, highly inhomogeneous and macroporous internal organization of these hydrogels as well as scant opportunities in bioconjugation with PVA have largely ruled out micro- and nanoscale control and precision in materials design and their use in (nano)biomedicine. To address these shortcomings, herein we report on the assembly of PVA physical hydrogels via "salting-out", a noncryogenic method. To facilitate sample visualization and analysis, we employ surface-adhered structured hydrogels created via microtransfer molding. The developed approach allows us to assemble physical hydrogels with dimensions across the length scales, from similar to 100 nm to hundreds of micrometers and centimeter sized structures. We determine the effect of the PVA molecular weight, concentration, and "salting out" times on the hydrogel properties, i.e., stability in PBS, swelling, and Young's modulus using exemplary microstructures. We further report on RAFT-synthesized PVA and the functionalization of polymer terminal groups with RITC, a model fluorescent low molecular weight cargo. This conjugated PVA-RITC was then loaded into the PVA hydrogels and the cargo concentration was successfully varied across at least 3 orders of magnitude. The reported design of PVA physical hydrogels delivers methods of production of functionalized hydrogel materials toward diverse applications, specifically surface mediated drug delivery.