This is just a standard thing that goes up every year in connection with Hajj. Because of the causeway link and flight connections, BAH is often used as a back door route into Saudi Arabia, but the visa requirements for Hajj are fairly onerous and the Saudi authorities are extra vigilant in the lead up to that. Some people try to circumvent them by going to neighbouring states, which then gives them a headache with some arriving passengers. If you are not of the Islamic faith I wouldn't worry about it.

I've looked at the Tripadvisor ratings for Bahrain, they seem about right overall, no surprises, though the beach ones - which are popular with Saudis are a lot more expensive. I stay in the Sofitel for location convenience in town. If I were looking for a reasonable beach location I'd think about the Novotel if I have a weekend stay and want the best of both worlds, but that's not 5 star by any means.