Although I have not been near George for a while, my view is that it in itself has little to offer. And it's right at the Southern end of the Garden route. So also not ideal as a base. Why there is a Hyatt there beats me, but I would welcome views from others.
Knysna a is really nice. If you come all the way to South Africa, don't stare yourself blind on hotel points, if there is a good and not too expensive place that you have to pay for, do it, is my advice!