Where the locals eat

where are you staying I might be able to suggest somewhere nearby ,the Old Town is quite a large area and generally is touristy but I find there are a few places that do good local food and beer but there will be a fair mix or tourist and locals. I am in Prague several times a year and seldom eat or drink in the old town and many locals are much the same. U Medvidku,U Vejvodu, U tri Ruzi (bit more modern) Bredovsky Dvur and U Pinkasu will give you a flavour of traditional /modern traditional pub/resturants in the area.
http://www.tripadvisor.co.uk/members-citypage/unclegus/g274707
this is my city page on Trip Advisor, loads of my reviews, photos and forum contributions on that link so you might get some ideas from that .I was last in Prague in November 2014 and am heading back there on the 15th of this month but won't be in the Old town much.

I am also looking for some input on good affordable dining options. We are staying in Wenceslas Square, but some options in Old Town, the Jewish Quarter, and near the Castle would all be appreciated.

Bredovsky Dvur and U Pinkasu are both close to Wenseslas square Bredovsky near the top end and Pinkasu near the bottom, the other places are also walkable from Wenseslas square.Another place near the train station at the top end of the square in Ferdidnanda, a good fun place to try is Vytopna,it is a railway themed restaurant and your drinks get delivered to your table by little trains, prices are pretty good avoid during the day at weekends as it is usually full of kids but in the evenings we adults get to play .generally speaking Prague is pretty cheap to eat and drink. If you are there in the good weather then head out to the beer garden in Riegrovy sady, cheap beer, loads of sausage based snack food , big screen Tv and sometimes live music, there is a really good and cheap restaurant across from it but I can't remember the name.

http://www.praguebeergarden.com/
this website is good to find places that does great beer but in my experience if they do great beer they do great food too ,so have a look at the website and you can check places on the maps and it gives links to the website.

My favourite place near the castle is the Klasterini Pivovar set in the Strahov Monastery complex, about a 10 minute walk uphill from the castle or a couple of stops on the 22 tram from the castle tram stop the stop you need is Poholerec and the monastery is a 2 minute walk from there.
http://www.klasterni-pivovar.cz/

How about Italian? Our Czech friend in Prague recommended Giallo Rosso on Jakubska near the corner of Mala Stupartska - it's very close to Hotel Metamorphis. It was really great food at really great prices - they make their own pasta. It was lively, filled with locals, and made for a welcome cuisine change.

and if you fancy good old American food you could do worse than The Tavern, near Riegrovy Sady beer garden.
http://www.eng.thetavern.cz/
I am having a night out there in 2 weeks time with a few Czech friends and a couple of American buddies.
A few beers in Riegrovy sady beer garden then on off to the Tavern for Burgers, Fries and Pecan Pie.