I highly recommend taking a quick look at
HydroGuy's DLR Guide for WDW Vets. It helps put some things in perspective and will (hopefully) help you get a sense of things.
1. As everyone has said, yes, DLR does allow guests to make dining reservations up to 60-days in advance
online and over the phone. Just like WDW, DLR has a $10 per person no show penalty if you do not cancel your ADR at least one day in advance (most folks take this to mean 11:59 pm the day before the ADR). Unlike WDW, being online or on the phones right when the new day rolls is not really as critical. As PPs mentioned, you can often make prime ADRs with less than a week or so to go. You can try walking up (things seem to work better at DLR than it does at WDW), but it does not mean that will always work or that you'll have a short wait. I've been there when they were turning away guests at Cafe Orleans, Blue Bayou, Carthay Circle, and other locations. So if you know you want to eat at a specific place and/or a specific time, I would make an ADR.
2. My family usually stays at the Best Western Park Place Inn, which is directly across from the Harbor Blvd pedestrian entrance to DLR. We've also stayed at the Ramada and Fairfield. They are all motels, which different pros and cons. We settled in on the BWPPI because of it's location. It's a motel, so it's nothing fancy, but we haven't had any major problems either.
3. There are lots of great dining options in DLR. I'd check out the
Disneyland Dining Reviews and Photo thread to see what folks have been eating lately.
DL: I have three TS locations that I like equally, Blue Bayou, Big Thunder Ranch BBQ, and Cafe Orleans. For the CS locations, my favorites are the Plaza Inn and French Market for full meals and Jolly Holiday for snacks.
DCA: My favorite TS is Carthay Circle. My favorite CS is probably Flo's, but in truth I'm not a huge fan of any of the CS offerings in DCA.
DTD: My favorite TS is Ralph Brennan's Jazz Kitchen, with Rainforest Cafe as the runner up. My favorite CS is Earl of Sandwich.