The main problem I see with the OP's situation is that someone else for the team booked a block of rooms, in advance, thus taking availability out of inventory. Then the OP wanted to use the points as currency. I was told a few months ago that affiliate hotels are contractually bound to provide a certain number of reward rooms (although I'm sure it varies by day, week time of year, etc and is based on some type of statistical formula most likely looking at past occupancy rates.) I had asked about this because I couldn't get a government rate but I could get a standard reward room using points, which didn't make much sense to me at the time. If the OP's team booked a block of rooms, the availability of reward rooms would probably decrease, and if the hotel is sold out (no availability, stay anytime rewards aren't even a possibility.)

I also know by experience, if Bloomington has any events happening which requires hotel stays, it books very quickly. I've often had to stay in Bedford (a 30 minute drive south, or Indianapolis a 60 minute drive north when rates were at a premium in Bloomington due to events.) And a $300 rate in Bloomington, I bet more than one event was happening locally.