There are some good hotel options while visiting Niagara-on-the-Lake. My recommendations include:
I stayed at the Oban Inn located across from the Lake at 160 Front St. It is a charming inn that has a restaurant and spa onsite. I thought the location was perfect. It had free parking in their lot, so I just parked my car and was able to walk to the downtown shops, restaurants and theater. In this way, I avoided the crowds downtown. My room was very comfortable and beautifully decorated. They offer a number of room options from deluxe, premium and suites located in the main inn and in the surrounding cottages on the property. I enjoyed their dining room with the complimentary breakfast buffet and also for dinner on my last night. It is also away from all of the downtown crowds which is an added benefit.
Vintage Hotels has some good hotel options including the Prince of Wales downtown at 6 Picton St., the Moffat Inn at 60 Picton St. and the Pillar and the Post Inn at 48 John St. If on Picton St., I would make sure to ask for a quiet room away from the street.