Keep the flight. If the flight leaves on time, great. If it cancels you can get a full refund, not just a credit. Even if you decide not to take the trip it's always better to wait to cancel until close to departure for that reason.
If current pricing is at or below your reserved price, cancel the hotel tonight and rebook tomorrow when you board the plane and are sure you'll need the room. As you say, it is likely you'll be able to do so and often can snag a cheaper rate on the day of arrival. Yes, you can probably call the front desk tomorrow and get out of the reservation but I prefer just to avoid the hassle.
And leave your CDC card at home. Too risky to lose it. Just take a picture and have that on your phone. Every place in NYC accepts that.