It's much cheaper to fly into Buffalo than into Toronto because it's a domestic flight. Flying to Canada adds $$ in international taxes plus the Canadian GST. And Buffalo is closer to Niagara Falls. But if you''re looking for a day trip, do drive over to Toronto (via the QEW EXpressway) as it is a world-class city.
No passport for driving to/from Canada yet. But proof of U.S. citizenship is required as before.
Alamo will give you a basic map which is sufficient to get you to Niagara Falls. Out of the airport it's all interstate highway, basically I-90 west to I-290 beltway around the north part of the metro area and then I-190 north. There are some tolls so if you're from Illinois and have I-PASS, bring it along because you can use it in New York's EZ-PASS lanes. If you're from Florida and have SUNPASS, don't bring it as it would not work there.
Before you go, call 1-800-BUFFALO and 1-800-ONTARIO and ask for tourism information to be mailed to you.
Your U.S. personal auto insurance is valid in Canada. Your liability insurance would apply to the rental car as would your collision/comp insurance.
BobK/Orlando