Ontario: Toronto and Niagara

Can't help you with Toronto, but in 2016 we stayed at the Harbour House in Niagara-on-the-Lake for 6 nights, used it as a base for the area. We enjoyed our stay there very much, everything was top-notch. Although we did not take one, they did offer wine tours. NOTL is a lovely little town--we were glad we based there instead of closer to the Falls.

You are heading into peak tourist times. Many things will be closed on July 1. Niagara-on-the-Lake is very pleasant but prices will be up, especially because the Shaw Festival will be operating in its three theatres. A car will help you visit all the scenic and historical sites outside the Falls. Lots of wineries, some with respected restaurants.
In Toronto, the attractions you mention are all in the downtown, so a hotel in that region will be convenient. The main street, Yonge, is also a main subway line. I suggest narrowing your search to Yonge-Bloor and south. There are new hotels south of Central Station near the lake but they are somewhat cut off by the main railway tracks. Google Maps can help you sort all of this out and provide links to hotels.

A few years ago, on a very sad mission to Toronto, we stayed at the Victoria Hotel on Yonge Street. It was ideal for us and there was a pay- to-park area not very far away.

A few years ago we had a very bad experience at Hotel Victoria and I would never return. (It was other guests causing the problem, but management did nothing to alleviate the situation.) This year we stayed at the downtown Hilton and it was fine. In Niagara-on-the-Lake, we've stayed in two different vacation rentals, which generally end up being more economical for us than hotels or B&Bs.

Hi David,
If you are able to fly into Hamilton and out of Toronto you will save some time and traffic. And Hamilton is a great little airport, rental cars are right there. Then you have cut off quite a few kilometres to get to Niagara on the lake. There is a cool little "castle" Dundurn in Hamilton near the airport, if you want something a bit different. If you like plays you might want to book something at the Shaw Festival as well.
A number of years ago I stayed at the Oban Inn. It is a small hotel. Really liked it for location, but may be pricy now.

In Toronto we always enjoy a day at Centre Island. Not Centeville, unless you have small kids, but a walk around the rest of the island, can rent bikes, there was a nice restaurant last time we were there. Catch a ferry at harbour front.
The Royal York hotel would be convenient for catching the train the last day.

My only other thought is whether to reverse your order. I wonder if Niagara on the Lake might be a little more enjoyable mid-week compared to long weekend. It wouldn't work as well with your car rental though.

Canada Day weekend will be busy and full of events in both NF and TO. That makes it both a good and a bad time to visit! Including fireworks. Make hotel reservations in May; earlier the better for choice.
NF has numerous big hotels; plus B&Bs etc. The Falls are the main attraction. A room that overlooks the Falls is both romantic and beautiful. Parking can cost alot.
Research Niagara on the Lake NOTL, which is a lovely town with the Shaw Festival and surrounded by wineries. It is an enjoyable 30-50 minute drive from NF, along the Niagara River. On the way is the Butterfly Conservatory, excellent if you wish to be surrounded by beautiful flying butterflies. Having a car will make the wineries a real possibility, but remember the "Don't drink and drive" laws. Maybe a winery tour bus will be operating?
In TO there are two markets, St Lawrence Market and Kensington Market. They are different, unique, and both worth visiting. There is a new Aquarium next to the CN Tower that is getting good reviews. The rotating restaurant at the CN Tower is wonderful IF the day is clear, even better at sunset. If you enjoy hockey history visit the Maple Leaf Gardens which has been transformed into a large grocery store with a large Ryerson phys ed facility on top. But the outside is still the same. A car in downtown TO is an impediment.
Transportation from Pearson Airport to downtown TO is easy and fast [for a large city] either UP Express train or TTC bus/subway.
There is so much information available on the internet that it will be easy to plan your journey.
Harvey

Update: We booked a bed and breakfast in Niagara on the Lake for the first three nights and will be there for the Canada Day weekend. There are five nights left and we are undecided about spending all of them in Toronto. We are considering adding another night in NOTL and visit the falls after the long weekend when the crowds are possibly less. This plan would allot four nights in Niagara and four in Toronto.

We will pick up the car at the airport for the Niagara portion and drop it off when moving the city. The express train will be used for the trip back to the airport and public transit while in the city.

Thanks for all the comments, now we turn our attention to Toronto lodgings.

Niagara: Niagara Falls is the obvious attraction, viewing along the riverside, as well as atop the Skylon Tower and by boat "Maid of the Mist". We also always enjoy a visit to the Botanical Gardens, touring the Wineries, strolling along main street in Niagara-on-the Lakes. If you enjoy theatre, Shaw Festival is a must.
Toronto: must see sights downtown include CN Tower, Ripley's Aquarium, Hockey Hall of Fame, Harbourfront, financial district skyscrapers, City Hall. Also worth visiting are our two markets: St Lawrence Market & Kensington Market; Distillery District arts center; Yonge Street Strip between King and Bloor for a bizarre mix of shops and restaurants; Beaches stroll along the boardwalk and Queen Street East; West Queen Street West for trendy boutiques and galleries; and Yorkville with its designer boutiques. Also first class Art Gallery of Ontario and Royal Ontario Museum.

We are looking at accommodations in an area west of Spadina Avenue to Ossington Avenue and South of Bloor Street to Queen Street. Does anyone have experience with this area? Is it a good location?

As long as you're within relatively easy walking distance (your definition) from a metro stop, you're good to go. The trams are also very workable, though they get a little old for long distances.