When I go to WDW, I am one of those who has to stay onsite. At DL, I feel that staying onsite is a luxury, but it won't make or break the trip. I only stay onsite every few years when I can afford it, but because everything at DL is so close together and the atmosphere is quite different from WDW, I will usually stay offsite. If I stay offsite, I like the Howard Johnson across Harbor Blvd. Last year I bid on Priceline and got the Hyatt Regency Orange County for $44, and even though we had to pay for parking, it still came out the same or less than what we would have paid had we stayed at HoJo. It's further away, but in a nice area and with very good shuttle service.
Onsite, I really love the Grand Californian since it reminds me so much of the Wilderness Lodge at WDW, which is my favorite. This year we thought we'd try something different and we're staying at the
Disneyland Hotel -- I thought I'd like to splurge this year because of the 50th Anniversary celebration and the special packages they're offering. However, you can get packages at the Good Neighbor Hotels (like HoJo) too.
I would allow a minimum of 3 days to cover the parks, but 4 would be ideal to cover them at a leisurely pace and enjoy the hotels (even if you decide not to stay onsite, the hotels are still worth exploring) and Downtown Disney.
I think you only need one day to go to Universal. You could just drive over there for the day. You might want to stay and have dinner at City Walk since they have lots of interesting things there as well.
You might also want to consider Knott's Berry Farm which is only about 15 minutes away from DL. Even if we don't go into the park at Knott's we still like to make a trip there to enjoy the shopping area and restaurants outside the park (we're Snoopy fans).