SMH is on the East Side, somewhere around the mid-30s, I think. I don't know that area of town at all (Theater District, Museum Mile, Chelsea, and the village are the only parts of my knowledge base), so I can't tell you about restaurants near the hotel. I can tell you that it'll be something of a hike from the hotel to the theater (which is on 42nd, near Broadway), so you'll probably be best off taking a cab. Tipping is a personal choice type of thing, but at least 20% would be expected on the East Side and in the Theater District.
Re: restaurants. A few tips for the Theater District: If you like fairly inexpensive but good and filling food, try Virgil's BBQ on 44th near 6th. If you like more expensive food, you can't beat The Palm (a steakhouse; they'll give you a free dessert if it's your first time visiting there!), which is, if I'm remembering correctly, on 46th btw Bway and 8th. By the way, if you like "known quantities" in restaurants, you can always eat at Shula's steakhouse (pretty good, not as expensive as The Palm), which is in the Westin Hotel (42nd and 8th).
If you're interested in traveling farther afield from midtown and the East Side to try some food in the Village, let me know, and I can point you in that direction.
Good luck.
