We visit SLO every summer for the Central Coast Wine Classic and would recommend staying by the water in either Morro Bay near the water or Avila Beach at the Cliffs Resort. SLO is a great town but Morro or Avila aren't that far away. Morro is closer to HC, too. I'd spend 4 or 5 days if I were you. Lots of good restaurants and wineries in the area.