In the pre cell phone days, and before my Chinese skills were solid, I relied upon a combination of maps (e.g. the free ones that hotels hand out) and taxis, and never encountered a single problem.

Now that we all have smart phones, the drill is even easier. Personally, I would never fathom a private tour, and would only avail of public transit when doing so made sense.

For hotels in xi'an, I tend to value proximity to the drum tower over quality, but not all western chain properties are poorly situated.

As for what to do on your free day, that's a matter of personal choice. When is your trip, and what are your interests?