We aren't far from Knoebels. It is in the middle of nowhere, but it is a nice little park. Free admission, free parking, great food. I think it is a better park for younger kids. Hershey can be PRICEY, and the lines can get VERY long. Danville is probably your best bet for a hotel. Knoebels does have a campground, if you are into camping.
Dutch Wonderland in Lancaster is another good choice...