You still have a chance at the upgrade from ORD-FRA and can try using a SWU paper certificate on the FRA-HYD portion.

The Novotel is ok -- in terms of convenience to the convention, it cant be beat. Most of the other hotels are at least 15-20 minutes away.

Hyderabad tourist activities should take up a day max (Golconda Fort, Charminar, the Royal Musuem etc.) -- connectivity from Hyd to other parts of India are fairly good so you could easily combo with another destination.

You could try Pondicherry which is accesible from Chennai -- there is a good writeup in The New York Times travel section.