Vicki,
I've stayed there several times before ... It's not the poshest in the world but very acceptable and in a great location. The E-line from JFK has a station just across the road ( its far faster and cheaper than a cab ) and you just come out of the subway, cross the road and you are at the hotel. There are several restuarants nearby ( of all price ranges ) for food and the subway is 2 minutes away. You can get an unlimited day ride pass on the subway and bus for USD 7.50 and if you get it at the airport it will pay for the subway journey in from JFK.
The tour might well be OK but remember that traffic moves VERY slowly in New York and you could easily spend most of your time sitting on the bus in traffic. If the family can cope with it I'd get the day pass on the subway/bus and plan your own sightseeing ( thats what we did ... but then that was with no kids in tow ). Its also quite easy to walk between some of the sights and you get to see some of the real city.