It's been a while since I was there but my impression is that there is no huge difference in the quality of both hotels you mention. Seems you get a much better deal at the Sheraton so I would go with that one. Main difference regarding appreciation of the falls is that you get a very impressive panoramic view from the Brazilian side and a more "up close" and dramatic experience from the Argentine side, including a walk to the edge of the falls.
Let us know how it goes. Enjoy!