"what are some of the best hotels to stay at (in all price ranges)"
Well this is kind of hard, the best choice would be just to stay on the property at either Hotel Breakers or Sandcastle Suites (as far as I can tell, Lighthouse Point is entirely booked up) since they are both in immediate walking distance of the park. Staying off the property is your choice, theres a number of hotels in a number of price ranges in the immediate vicinity but you will have to rent a car to get there since I believe no shuttles are offered to the parks. I'd say just spend a little more and stay on the property, it's worth it big time!
"how many days should we do the CP"
Do what I'm doing and do 3, go to Cedar Point the first 2 and Soak City on the third because it's definitly worth it. Go during the middle of the week, thought you can't really AVOID crowds in July they might not be as bad during the middle of the week than they would on Monday, Friday, Saturday or Sunday.
"is a car rental needed (we are flying into Cleveland)--"
As I said before, I don't believe ANY hotel offers shuttle service (probably because it's a small crowded causeway as is!), so a rental car IS a necessity
"any don't miss events or shows "
Only the fireworks show is a must see, if your main concern is the rides you probably won't have much time to put aside for a show.