Hello! We just went to Storyland over July 4th weekend this past summer. I used to go there as a child and this was my first return trip as an adult with my own family

We had a great time!
We ate lunch and snacks in the park and I thought the prices were reasonable.
As far as where to stay....we stayed at the North Conway Grand Hotel. I am pretty picky about cleanliness and I thought this hotel was very clean. I'm sure you could find cheaper places to stay but it has a really nice pool area and a brand new playground. It's also just a few steps to the outlets, which was convenient to walk around in the evenings.
If clean/new is important to you, there is a brand new Residence Inn in North Conway too - it was being built last summer but is now open for business!
One other place I can recommend is the Hampton Inn & Suites. I have not stayed there personally but my best friend and her family did and they loved it! Their rooms were modern and clean. It also has an attached indoor water park which is included with your hotel room rate.
I agree with the previous poster - I think you can see everything in just one day but you may want to arrive on your first day after 3pm and then go the following day for free. It's a great deal!
I know you didn't ask but if you're looking for a reasonably priced breakfast, The Blueberry Muffin is great! It is attached to the Yankee Clipper Inn. I would also recommend the Red Fox Grille in North Conway for dinner. Great food, nice ambience but very family/kid friendly. They even have a special kids movie room and play room to keep the kids entertained while waiting for a table or their food to arrive!
Good luck planning your trip and hope you have a great time!