We were there about 4 years ago for the 4th, back when my brother in law lived in Tampa Bay. We flew in to visit him, spent a few nights at his place, then drove over to the other side of the coast...In my experiance, if you don't have a hotel booked by like 3 months ago, you won't get one. We had to book ours well in advance. Then, we were called saying that they had over booked and we were one of the last ones to book, so they had to cancel our reservations. After that, we called EVERYWHERE about 4 months before the 4th and EVERY SINGLE place was BOOKED. So, we were put on a few hotels 'wait list' Finally, one called us back about 2 months prior to us staying there and said they had a room avail.
You are right. Streets close down, they fill up with people, vendors and activities and if you don't stay CLOSE, it's a TON of walking. We were quite happy with our location, but the prices were high, even for an 'event'.
It was fun and a great experiance, but If you don't already have ressies, it may be impossible to get them.