Guilin is a big city and Yangshuo is a small village. The attraction of this area is nature, so obviously you find this out of town! Nothing special in Guilin.

But aren't reed flute cave, elephant hill, and 7 star park in Guilin not Yangshuo? I agree that it is preferable to stay in a small village over the big city, but is it not worth staying in Guilin to see the sites near there? Or to stay in Guilin because it's closer to Longsheng?

Because there're similar and better, reachable from Yangshuo.

How far each of the sites from Yangshuo vs Guilin? If they aren't much farther then maybe it does make sens to stay only in Yangshuo.

The sites you mentioned are all in Guilin on the Li River, except that they are mainly attracting big Chinese tour groups, and tacky christmas lights are used to decorate the inside of the Caves. So when you get to these places, you will be squeezing in line with hundreds of Chinese tourists. Where as you go to Yangshuo, you'll see also very similar rock formations and caves, but they are far more wide spread, and less crowded, and natural. You would explore the caves with a flashlight, as opposed to Christmas lights. Also, West Street in Yangshuo is now a vibrant community of international independent travelers, so you'll get to rub shoulders with people from all over the world, and accommodation is a lot cheaper. So it is okay to stay in Guilin since you are going to Long Sheng, and if that's all the time you'll have this time. However, if you enjoy the Chinese country side, you may regret not staying in Yangshuo longer, and may want to return another time.

Correction, the bus ride to Yangshuo from the terminal is only 1 hour by the express buses, so more reason to head straight there :)

Long Sheng is closer to Guilin then Yangshuo so you will need 2 nights there if you arrive at night. Get to Yangshuo as early as possible the next morning. The countryside is beautiful so get on a bike or bamboo raft as quickly as you can.