I am going to go through my personal recommendations based on some responses i have read in this thread, so bear with me:

The Watergate is walking distance from the waterfront but that's a moot point being that you are going smack dead in the middle of winter and the bars on the waterfront are closed outdoors. BUT if you do make the walk down, there is a fairly new restaurant/bar called the Harbor Club. It is a five minute walk from the Watergate, just walk down Virginia Avenue towards Georgetown (ask the concierge).
If you are interested in excellent fusion cuisine, i HIGHLY recommend TenPenh (10th and Penn). Great asian atmosphere, wonderful service, excellent food.

Also an important note about cabbing from the Watergate: The cabbing system is based on Zones (well, since i left last May it still was). You are in Zone 2 at the Watergate (which is Virginia Ave. and 27th Street). The line for Zone 1 is east of 23rd Street going towards the Capitol. This means that if you are going to go to the restaurants mentioned such as TenPenh, Marakesh, etc, it is TWO ($6.90 the first person, $1.50 each additional) zones. If you walk over to 22nd street and grab a cab from there, it is ONE zone($5 first person, $1.50 each additional). If you go towards Georgetown from the Watergate (Citronelle, the waterfront, it is one zone.
The reason i mention all this zone mumbo jumbo is because DC cabbies are NOTORIOUS for stiffing people making them believe they traveled through 3 or 4 zones. PLEASE keep this in mind, that no matter where you go in DC proper (within NorthWest DC, where most of the touristy things to do are, i.e. museums, etc), you will go no farther than TWO zones. I lived there for 5 years and there were plenty of cabbies who felt they could stiff me.

If you are going to go to Kinkeads, and the weather is not too bad, ask the concierge for directions on how to get there by walking. It is a 5 minute walk from the hotel on the other side of the George Washington University campus. If you cab it from the hotel is it pretty much a waste of $10 in cab fare plus tip.

DC Coast is an excellent restaurant, and if you are looking for seafood, Kinkeads is good and simple, but I would by far choose Oceanaire. The food is great, the seafood is freah and phenomenal.

For italian, as Slawecki mentioned, there is Galileo, but personally i felt it was way too overpriced.

As for Sunday Brunch, the Kennedy Center Rooftop has a nice Sunday brunch for i think $27/pp and a great view of the city. Old Ebbitt is classic DC. I believe the Four Seasons brunch has been rated the best in DC before, but extremely expensive (i beliebe $75/pp).

As for times the bars close, DC laws require that bars close at 2am on weekdays and 3am on weekends. No real all night bars around.

Adams Morgan has the largest selection of bars within a small area. If you want some more cool bars, try the 18th Street area, which includes places like Ozio, Dragonfly, 1223, etc.

For late night dining, as in the best 4am Eggs Benedict, try Au Pied du Cochon on Wisconin Avenue in georgetown 2 blocks up from Wisconsin and M (downtown georgetown).

As for the hotel itself, Priceline actually did a good job in setting you up. I think the location is ideal. About 6 blocks from the Metro station, 10 minute walk to Georgetown, and the hotel itself is excellent. My parents would always stay there when visiting. The service is wonderful, the hotel is small, and overall its great.

Sorry if i got off track here, i was just writing as it came to my head. Hope this helped and enjoy your stay in DC.

-Eli