You should stay at the Sheraton on the view. It's a great hotel with great service and view is awesome and is dead smack in between everything that is if your staying on the Canada side. Have fun.
Went up last year - do take a walk along the American side of the gorge. Do skip the aquarium (oh so disappointed in that place).
You can only go to the Canadian side if you have a Passport these days.
I think we'd stayed in Williamsville at a Comfort Inn on Transit Road - keeps you near to most things up there without having to pay silly prices for a room to sleep in. (it's location is a little odd as it is behind a Rite Aid parking lot) - If you do stay there - there is a pancake place about a block or two away that ROCKS! Lots of nice places to eat long that strip.
The hotels closer to the falls (and Buffalo) were priced much differently
Do the Maid of the Mist and either the decks on the American side of the tour on the Canadian side. We did a side trip to Toronto for 2 days and caught a Jays game.