A cab is $35 flat fee from YUL to downtown Montreal. I would suggest that you specify you want a minivan; this would be much more convenient than any public transportation option.

I personally would steer clear of the Berri-UQAM area. It's not that it is particularly unsafe but it is popular spot for pushers. You see lots of questionable activity going on in this area after the sun goes down (and some even when the sun is up).

I agree with the assessment about the McGill area. Great downtown location and probably only a 15-20 minute walk from Old Montreal. If your really tired, it would probably cost less than $10 to catch a cab back to the downtown, which is what it would cost 4 of you to purchase tickets for the metro (subway).

If you are going from Montreal to Quebec City, I would suggest you consider taking the bus or train. The bus leaves from the terminal at Berri-UQAM while the train leaves from Place Bonaventure. It is way cheaper and faster than flying, especially when you factor in the costs of transportation to and from the airport.

As for location in QC, I prefer the Upper Town simply because of the views. I also get the impression there are more opportunities for lodging than in the lower town but that may be my impression only.

Take a look at Tripadvisor.com as there are a number of condotels listed for the Montreal area which have kitchenettes. You can also look at Craigslist to look for short-term furnished apartments.