We just got back from doing three days at Niagara Falls on the Canadian side. We'd previously visited the American side, which was fine for a brief stop as part of a larger trip, but the Canadian side is where it's at if you want the best view and plenty of activities to do.
We stayed at the Embassy Suites, which is a in a prime location at the top of the incline railway with easy access to the falls. Book a room with a Canadian *and* American falls view- I wasn't sure if it would be worth the money, but my 10-year-old couldn't bear to go to sleep our last night and passed out while watching the falls from our window, because the view was that good. We originally booked the 11th floor and they moved us to the 23rd when we asked nicely at check-in. We also asked them to remove the $35/night convenience fee, since we are Hilton Honors members and already get wifi for free, and they did so without a fuss. Park at the Fallsview Casino next door to avoid the $60/night parking fee- it's only $5-20 when you leave the casino garage and a quick walk to the Embassy Suites. We also ate at the casino food court a few times when we wanted a quick bite to eat, and the prices weren't too jaw-dropping.
We bought a Groupon for the Greg Frewin Wild Magic show, and it ended up being everyone's favorite activity from the trip. I had figured it would be ridiculous and cheesy and went in with low expectations, but the show was surprisingly engaging. It only cost about $10 per person after the exchange rate, I think, and you can ask the box office about upgrades to a closer section than offered in the Groupon. We also did the Hornblower Cruise twice- had a great time on the morning cruise before it got too crowded, but the evening fireworks cruise was definitely not worth the premium price.