You will have a great time in Rio!
Regarding your questions: we have transferred in GRU for a domestic flight in well under 2 hours, no problem. There is a "connection desk" right outside customs.
Many years ago we stayed at that Sheraton. Yes, the location stinks. Yet, on the upside the pool is very large and it has its own sort of private beach. Good buffet bkfst and views from the bkfst room. I believe the hotel is undergoing or has completed very badly needed renovations. For taxis, avoid the over priced hotel taxis waiting out front.
I believe the Cesar Park has fallen very far in the past few years and is in desperate need of renovations. It has a teeny tiny (near bathtub size) pool on the roof. Yet, if the price is right....
For the additional days you may want to look into heading to Buzios. About a two hour drive away. Great beaches and very different from Rio.
Have fun.