I would suggest staying on-site (at a Disney property), you don't have to worry about parking, you can go back and forth to your hotel anytime (with the right type of passes), you get in an hour early on selected days, anything you purchase gets delivered back to your hotel (so you don't have to carry it all day, through the whole park) AND it's just more fun.
Depending on how long you're staying, your budget, and what you would like to do while you're there, kind of helps to determine where would be good to stay and what type of passes you should purchase.
We almost always stay at one of the value resorts, they are farthest from the parks, but we are rarely in our room that much anyway. And we always purchase park-hopper passes BEFORE we get there, that way we can come and go as we please, visit multiple parks on the same day (good for seeing more of the parades and doing character breakfasts), and since the days never expire, you don't feel like you've lost anything if you don't use all the days.