Universal is fun! Everything is definately within walking distance so no worries on picking a hotel. Royal Pacific is the cheapest, then Hard Rock Hotel and finally Portafino Resort. Portafino is the furthest away, then Royal Pacific and Hard Rock are about the same in walking distance...RP being closer to IoA, HR being closest to UO.
I think if you plan ok, you'd be fine doing both parks in a day and a half - with planning because you know what you can ride and what you can't with the kids. Since you're staying onsite you already have a heads up with ride lines - and it realy does help more than Disney's FP system.
As for discounts, they do offer
AAA and Supersaver rates though they come out a different times so if you book early you want to call back and check and see if any more discounts come out. (Like if you book AAA, supersaver may come out a month or two later.)
If you do Sea World, I'd suggest doing the guided tour because it's hard to fit everything in in one day with all the timed event's they have there.
Off to get ready for church and then off to a baseball game!