This is not convenient at all which is why it's so cheap. When you're downtown, you want to walk not drive, and the nearest Embassy Suites to AG Place is the one at 600 North State. The Navy Pier one (at Columbus) is not convenient to where you want to go. In terms of cost to park, you'll pay about $40-45 a night at most downtown hotels. If you take the car from the hotel and drive to Watertower Place, you'll spend another $25-30 to park for a few hours at the mall. Of course, you could cab it, but that's not the most convenient thing to do if you have a few kids. Really walking is the way to go, so it'll be worth it for you to get a hotel near enough to walk easily.
If Embassy Suites on State St. is too expensive, try the Homewood Suites which I believe is on Grand Ave. It's a fairly easy walk to AG Place, and if you want to cut through Nordstrom and the shopping mall to which it's connected, you can avoid some outside walking; we've stayed there twice and liked it. There's also a newly redone Hampton Inn and Suites in that same area; it's on Illinois Street, and it does have suites that are similar to those at Homewood or Embassy but at a cheaper price. I've never stayed at this one, but we've stayed at others in other ciites and liked them.
If you're looking at a map of where AG Place is (Watertower Place is the name of the mall), you want to stay to the west of that location. The neighborhood all around there is fine in either direction, but the hotels, restaurants, and all the stuff you'll want is on Michigan or just west of it. East is the lake and some residential buildings, and some blocks, the streets are at different levels, so to get across them, you need to use stairs. That's not the easiest thing to do.