About hotels: I always stayed at families to improve my spanish. But I think, what the others told you is ok.
About places to visit: Visit the equator, and craz is right, the real equator is much more interesting. Do not do the cable car as you will not be adapted to the altura while you are there. The think I have to recomend you is the museum of
Guayasamin.
About shopping: Try to go to
Otavalo on Saturday. It might not be the cheapest, but the best you can do.
About arriving: If you have a hotel shuttel, take this one, because all the taxis and limo services will ripp you off. Within Quito, you should, during the day, never pay more than 10 US-$. (Which is still triple what needs to be payed.)
About security: Always the same, watch your belongings, do not show your mobile, do not use deserted streets etc.
About money: Ensure that you have small US-$ notes with you. 1US-$-Notes will make live much easier.
Quito is nice and worth traveling to.