Are you staying on the Canadian side or the American side?
The Canadian side is much nicer and with much more to do, but I think you may all have to have passports now.
On the Canadian Side, we stayed last fall at the Crowne Plaza Niagara Falls Fallsview last fall and it was a nicely restored 90+ year old, hotel. Service was good & the top-floor fallsview restaurant was decent, although pricey (even with the $40 coupon they gave us at check-in). Rooms were kind of small, but for the age of the hotel it was to be expected.
One comment though, on the Canadian side, ALL the hotel chains have kind of a reputation for nickel and diming you to death by offering great teaser rates and then charging a fortune in all kinds of undisclosed fees & taxes. You can't really do much about it, that's just how they do business, so just make sure you ask ahead of time before you do anything (even just eating in the restaurant in that hotel has a fee, and a special government tax, because it has a falls view). Travelzoo.ca always lists a lot of the package deals on the Canadian side of the falls if you're looking to compare. Some of them can be booked through the PC website as well for the points.
I can't really comment on the US hotels, as the Canadian side has so much more to do that we just always stay there.