We arrived on the AM flight from PHL, which was about 2 hours late. We stayed far from where you suggest to make it easier on our departure day (cruise) -- I don't know where you're going at 11 am Friday. We stayed at Hotel Principe near the train station. Hotels closer to St Marks will be much more expensive. We found that part of the charm of Venice was walking around, getting "lost" on the way from the hotel to the sites and discovering smaller, very nice restaurants that had better food for less money than those packed into the tourist areas. We didnt mind at all the 20-30 minute walk to St Marks -- that was a great part of the day.
I'd get an idea of the Vaporetto routes in advance; find a guidebook you like with a good map -- I assume thats what you mean by water taxis, since the vaporetto is the Venice version of the bus system (on water) and is affordable, daily passes are available, etc. There are water taxis, but boy are they expensive for routine travel.
As far as functionality on the day of arrival, for us we took the Alilaguna from the airport to the island (Vaporetto didnt go to the airport when we visited, not sure if it does now), and it dropped us off right between Principe and the Jewish Ghetto. We dumped bags and spent the day in the sun walking the ghetto, doing the museum/synagogue tour (easy to find; there's really only one main square in the ghetto, no reservation was needed), and walking down the big pedestrian street that runs Southeast from the ghetto (I forget the name). We went to bed a bit early, quite tired, and woke up the next AM ready to go. From a neurologic standpoint, staying up later is the better way to adjust your sleep wake cycle over going tobe earlier...
If you want to visit the Doge's palace, book in advance. There's a hidden secrets (or something liek that) titled tour that I wish we'd done. Get to the Cathedral early or suffer long, long lines.
On one walk back to the hotel from.... somewhere touristy, we tripped over a great restaurant. Didnt eat there that time, and it took 2 more tries to find it again. If I can figure it out, I'll post it. It was on the left side of the river, in a nice campo wtih a nice church, somewhat off the beaten tourist path on the right side of the river.