All the above math is very good. (Btw, welcome to Flyertalk!)
I generally use my points to ensure that I get a hotel room in the location I want to be in. I.e. Los Angeles.
While it is possible to stay in Ontario, or Pasadena or something, I prefer Santa Monica or Westwood. Since Santa Monica is quite a bit more expensive (Can be 30-50% more expensive) I like using points. I also use my Starpoints for resorts.
When I use my points at resorts, I allow myself to to spend more on things I wouldn't usually buy like long massages, golf rounds, nice bottles of wine, etc.
I generally find with 21 days advanced notice, I can get a cheap airfare. That rarely matters in the hotel world. High season is high season.