Stayed here for one Sat night in early July 2005. Hotel was very nice. Felt pretty new, lots of parking. We definitely (2 single early-30's women) felt perfectly safe. A typical hotel for this quality level and I would recommend it if you are just looking for a decent place to crash.
I believe there may be a bus that runs down Route 1 and will take you to the beach area in Rohoboth, but check with the hotel. We just drove down to the beach - its is NOT walkable. If you are lucky (we were thankfully), you can find parking at the beach on the street for 75 cents/hour at metered spots.
There is lots of stuff that is walkable from the hotel - restaurants, a Wal-mart, etc. but it is not walkable to downtown Rehoboth or the beaches.