Personally I would recommend the Best Western Music Row on Division or the Comfort Inn on Demonbreun (they are right next to each other). We stayed at the Best Western several years ago before we lived here and walked downtown from it. While it is walkable it is a short hike (through a good part of town too)-maybe a mile? But the hotels right downtown will be ridiculously overpriced for the festival. These might too but probably not as much. Right across the street are several bars/restaurants to eat and drink at. I highly recommend Dan McGuinness bar...their fish and chips is awesome! The tin roof has great quesadillas as well.