I would advise not to stay directly in Venice and find a hotel just outside, as there can be massess of people lugging their cases around trying to find their hotels and the water boats can get very crowded !. We stayed just outside venice in Mogliano Veneto about 15/20mins train drive away, it cost 6 euros total for two of us return, and from the train station in Mogliano the hotel was about 5mins walk, called Hotel Meridiana which was a lovely hotel. The trains are quite frequent from Venice station but just make sure it stops where you want it to.
We loved Venice its a lovely place either by foot or boat. The Gondola's are expensive but well worth it, you wont experience anything like it. Its like going to London without seeing Buckingham Palace !, once youve done it you dont need to do it again.
If you would like any other advice from our experience in Venice I would be happy to give the best advice i can