We visit Gatlinburg/PF at least once a year. The best hotel we've found in Gatlinburg is the Hampton Inn. Location, location, location is very important in Gatlinburg, because you want to be where you can walk to all the shops and restaurants - there is no parking downtown. Most of the hotels in Gatlinburg are older, and they charge higher rates - location, location location again! The Hampton Inn has nice clean rooms, some overlook the river. Great complimentary hot breakfast! Right between TGI Friday's and Texas Roadhouse, and across from Bubba Gump's.
You'll find cheaper rates in Pigeon Forge. It depends on where you want to spend most of your time. I'd say a family would spend more time at PF. You can drive or ride the trolley into Gatlinburg. They're only about 5 miles apart.
In PF, we've gotten a good room at a good rate at the Quality Inn at Dollywood Lane. It's directly across from the Dixie Stampede. In walking distance to many restaurants including Denny's, Pizza Hut, Cracker Barrel, Kristy Kreme. The rooms aren't new, but they are clean. They have a complimentary breakfast, but it's not that great. We've stayed there twice and had no problems with our rooms whatsoever, and the staff is always friendly. The same owners own the Comfort Inn & Suites next door. It's newer and has interior corridors.
We've also stayed at the Park Grove Inn, it's closer to "Music Row" area of PF. This place was pretty nice too - nice, big rooms, clean. Complimentary breakfast was sub par. It's closer to Sevierville, where the best outlets are! There's a Disney outlet there too!
One thing to keep in mind is that Gatlinburg/PF is very busy in the fall, especially weekends. We were there the last weekend in September, and traffic on 441 was a standstill. Also, do some searching and make sure there isn't any car shows going on while you're going, because they will pack out PF and you won't be able to drive or go anywhere. I think Rod Run is the 1st weekend in Sept., not sure about that.
Weather - I've been in May and worn shorts, and I've seen snow! So it could be from one extreme to the other.
There's lots to do there, and lots of ways to spend your money - Dollywood, dinner shows, laser tag, go carts, mini golf, shopping, etc.
We go every May, as DH goes to a conference there every year, so if you have any questions I'll be glad to answer them if I can.