I hadn't realized there was a new AG store on Michigan Ave - is it far from the old one?
I've only stayed at one hotel downtown - The Allerton. It is usually the cheapest of the ones on North Michigan Avenue, I think. I first heard of it when my then-boyfriend was doing his Peace Corps training, and that's where they stayed. Then, a group of us stayed there for my bachelorette party.
There's a ton of shopping there, as everyone has said. The museums are mainly a bit farther away. My kids especially like the Museum of Science and Industry (quite a bit farther south, but worth the trip). There's a Children's Museum at Navy Pier, which I haven't visited, but it would be much closer.