Thank you folks for so many responses. I have no status with Hilton - neither from stays nor from cards. I am just not a frequent hotel inhabiter.

I was in my own car (not even a rental) and the other place was 5 mins away - so no problems with transportation, although it is good to know these things. To be fair, they sent me to a much nicer hotel than what I had booked and I surely under-paid where I stayed. However, I neither asked for it nor did I really benefit from the nicer hotel as I spent very little time there (just breakfast and bed).

So it looks like any of 3 things is a possibility, pending better understanding of the matter:
a) Hilton pays for the stay (or other compensatory gesture) - would be very nice of course, but I don't mind paying what I would have anyway. I do appreciate the point about 100% cancellation penalty, and I would never question this line of thinking. In a way, turnabout is fair play.
b) Hilton issues original credit in terms of points.
c) Marriott issues retroactive credit based on charges.

Perhaps I should first inquire with Hilton and see what they say.
b)