Paying with cheques is the same as paying with cash...you get full point and stay credit. DSoesn't matter whether you pay for $50 of the stay or the whole shebang.

The only reason you would want to partially pay for a stay in this case would be to put the balance on a (Visa, AmEx, MasterCard) to get credit for whatever promotion happens to be running at the moment.

Clearly, YMMV when using this approach. If your chosen hotel is a Category 3 then you are probably better off using points for the stay. But at a Category 5, I think your math is right...the stay and point credits make it a good deal.