Definitely do UO, and if you can find more than one day in your itinerary all the better. If you and your spouse are traveling without kids, you will find a lot of grown up fun at UO and wonder why you did not come over sooner. If you leave UO for the last day of your trip, you are likely to find yourself disappointed that you did not save more time for it. If you have the time, I would seek out guest services to upgrade your one day pass. They will do this relatively inexpensively.
I have stayed at the Holiday Inn across from Universal. (We are talking about the one with the World's biggest TGI Friday's aren't we?). It was very close. Be mindful that the free shuttle we took to the parks stopped at several other hotels after picking us up and I think it took us about 45 minutes to arrive (across the street) at the parks! I did not anticipate this. We waited a long time for the shuttle back to the hotel on our first night at the parks so on the second night, we took a cab back to the hotel for about $3. Well worth it.
Walking to and from the parks would not have been too far distance wise, however, I did not find the journey pedestrian friendly and since I was traveling with my seven year old son, I did not risk the walk.
I have stayed on-site at UO on my return trips to Orlando, originally for the Front of the Line Access, and later just because we had such a great time while there. While having FOTL is a nice perk for on site guests, it may not be necessary for January when I think the parks are less crowded. I would recommend the Holiday Inn as a good alternative. I would probably take cabs back and forth to the parks, however. While more expensive than the free shuttle, it was less expensive than the parking and certainly more convenient.