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We found it easy to stay on property at Disneyland. There are only 3 onsite resort hotels and we stayed at 2 of them--Disneyland Hotel and Paradise Pier. The 3rd, Grand Californian, we ate at and walked through, but did not stay.
It was great to be able to walk to the parks, get perks of early entry. It was all very convenient.
I've stayed both onsite and offsite at DL. While onsite is convenient and fun, if you are on a budget, it's not a must-do. The parks are within walking distance (albeit a little longer walk) from many hotels and they have shuttles too.
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The Disneyland Hotel is such a far walk to the parks, I see no reason to stay there. True, you can ride the monorail, but it sometimes is not working.
I haven't seen the "Disney Magic" so much in the DLR hotels. Grand Californian is, indeed, grand--but then, so is the price! It's the only property I've actually stayed in, as DH used to go to an annual convention held there; I'd never pay the full rates for that. In addition, GCH is beautiful but doesn't feel especially "Disney," in my opinion. The best part is its private entry to DCA and its location at that park and in Downtown Disney District.
Paradise Pier is very nice, too; most people walk across a quite busy road at a crosswalk and on into GCH.
BUT, for less than you'd pay at any DLR property, you can stay at a wonderful hotel on Harbor Boulevard and have a 5-10 minute walk to the parks. Or stay a little farther away and buy a pass for the ART buses---something like $3/day. Lots and lots of expensive and cheap restaurants on Harbor, as well.
If you have unlimited cash, go for the Grand Californian! Paradise Pier and DLR (I think) have rates closer to moderates at WDW.
As for perks, the only ones you really get from staying on property at DLR are Extra Magic Hours and being able to charge things to your room, since there's no need for resort buses to the parks.
I've stayed at Red Lion Inn and Best Western + Park Place Inn. The first was nice but not that expensive; the second cost a bit more, but is directly across the street from the parks, and includes breakfast.
Oh, and Candy Cane Inn, too, which is also lovely--you see the back of the Carsland backdrop basically at the end of the parking lot, and you're a short walk from the parks.
We've lived close enough that we were able to frequent Disneyland quite a number of times and those trips that we seemed to enjoy the most were the ones where we paid a little more money and stayed at either Grand Californian or the Disneyland Hotel. Something about being in the bubble. The close proximity of Grand Californian. And while Disneyland Hotel is in fact farther away than some of the hotels on Harbor Blvd, I found that hotel to be pretty magical. But, you have to decide what is more important to you. Some of the non-Disney/off-site hotels have pretty decent free breakfasts and I know some newer properties have opened just in the last couple of years, so there would be nice, shiny new furnishings. But, I know we've gotten spoiled, so if it's possible or in the budget, we tend to go for Grand Californian.