Absolutely YES about non-chain hotels. And BTW, there are several chains not very well known in the US (all the ACCOR brands for example - Ibis, Mercure, etc), so don't be afraid to book those.

Known chain does not necessary equal good location. I'd say that Ipanema is the best place to stay, Copacabana not so much.

I agree with the last poster about English not being very common.

Hotel staff (even cheap hotels) will be able to communicate in English with you for checking-in and giving you some basic directions. But not more than that. Don't expect to start small talk with the lady that sells grilled cheese at the beach (yes, it is cheese, not ice-cream as I originally thought)...or with the guys at the beach providing you with beers or food...But they are used to the tourists and you will get by.

Taxis? Buses? No dice!!!! But, Taxi drivers will understand simple commands to popular places like "THE WEEK???" or "LAPA". Having a business card of your hotel also helps, so you just show it to the driver.
(The Week is the gay megaclub, Lapa is a walking area full of bars and people drinking on the streets pre-club)

The hot locals will probably not speak English either, so learn a few words like "Ativo" and "Pasivo"

For food...try some churrascaria or those places where you can eat by the kilo. They are all over. There are a couple of expensive but reliable ones just on the north west side of the Central Ipanema Square (called Praça Nossa Senhora da Paz). There are also these "Juice/smoothie and Sandwich" places all over the place, I love those. But you will need to speak some Portuguese or Portunol (mix of Portuguese and spanish) for those - not tourist oriented

You will have a blast!