I think you are in great danger of dying of boredom in Watsonville.
Where will you be traveling from?
Ewwwww. What's your budget? There are so many choices in the area better than Watsonville.
Since you're arriving so late & leaving in the morning I think Watsonville will work fine for you.
With a family, I would not do a "cheap motel" in Santa Cruz. Yes, I am one of the the DE's here. Our cheap motels are not in good areas.
The Motel 6 in Watsonville is quite new and just off the freeway, no need to worry about safety. You will not be in town. Watsonville is about half an hour from Santa Cruz, or less, if you are stopping near the freeway.
My advice would be to go for it. Since you are not looking for a place to "visit" it is not relevant whether Watsonville is boring and I assure you the accommodations will be better than the "cheap motels" in Santa Cruz.
In your circumstances that would be my choice.
Don't go to Salinas. That is a place where would worry about safety.
Have a good trip.
Thanks Puter. Will keep the reservation then.
Thank you everyone for all the advice! I can always count on Tripadvisor to answer all my questions!