As a resident of Southern Ca, I know that area really well. The Candy Cane Inn on Harbor Blvd. is right next to the DL Resort Area. Convenience and economically speaking good choice. I know they remodeled the exterior in the last 10 years, but I don't know about the interior. There are several new hotels in the area a little further down the road on Harbor....Embassy Suites/Residence Inn......Hilton Gardens..not within walking distance to the parks but in my opinion a little nicer. They also have several chain restaurants within walking distance. Outback, Joe's Crab Shack, Red Robin etc.....
If it my choice I would opt for a Disney Resort. Was Paradise Pier really expensive? Just my opinion. Since the resort area itself is so much smaller, getting around is so much easier. Downtown Disney is just a short walk away from all the hotels. Movies, food, stores and ESPN Zone are just minutes from all the Disney Resorts....