The cruise goes all up and down Woodward, from Detroit to Pontiac. As far as lodging goes there are a lot of options depending on your price range and what else you might want to do while your here.
When you come here keep in mind that Michigan Hates everyone, and we therefore keep at least part of I-75 closed at all times, and give you a obscene detour. I would suggest the southfield freeway instead of their detour, or take surface streets.
Now I will plug the 'best spots', and no I'm actually not affiliated with any of them.
As for the cruise the best place IMHO is Birmingham area. Good walking area, lots of restaurants and stores. And all the rich people live there so you get the best cars. They also have large sections zoned off for cars that are too classic to risk driving with all those crazy people to be parked for your enjoyment. Also check out Bakers Square Restaurant and Pie, the food is so-so, but they have tons of different pie, which is all excellent.
If you want to see a concert while your here DTE energy music theatre(pine knob) and the palace have lots of concerts, and there are a lot of hotels in Auburn Hills(of varying price range). You should also check out Spargo's Coney Island and Greek food. It's also just a quick drive to brimingham.
If your interested in going to the Zoo head to Royal Oak, they also have a nice setup to watch the cars nice main street near woodward to shop, eat, hit the other Spargo's. For Hotel's near there check out Madison Heights.
If you want to gamble there are the casino's in Downton Detroit now, but a lot of the Hotel's are expensive down there.
Southfield is a cheap place to stay, and it's kinda in the middle of everything.