If staying in Waterloo do I need to take the train to top attractions?

While you can walk to many sights, you will probably be taking the tube (underground) or bus during your stay to some places.

Like many other large cities ( think Paris , Rome , etc . ) , you will be close to some sites and need the tube for others . It is an easy walk from there over Westminster Bridge to Whitehall and Trafalgar Square . The Imperial War Museum is a few blocks from the hotel ( I have stayed there ) Plenty of reasonably priced places to eat and Waterloo Station is a major tube and rail interchange .

Great! So I will take advantage of the two for one.
Awesome!

I'm not sure that you are catching the differences between train and tube. Both leave from Waterloo Station. I stayed in this area last April and found it quite convenient. One train trip from Waterloo that you might really enjoy is an outing to Hampton Court.

We also stayed there and it was lovely. There is a great seafood restaurant half block from there if you are interested and the hotel breakfast is fantastic. Enjoy.

Great! So I will take advantage of the two for one.

Careful. Don't confuse trains (which go between towns/cities) with the tube/underground system (which goes within London). These are 2 separate systems. Unlikely that you would need to take a train within London, but could conceivably take the tube several times per day.

So which one do I need to buy?

You need to determine what it is that you want to see in London. Your are most likely to be traveling on the tube (like a subway) for many of the sights that you want to see. I would buy an oyster card for use on the Tube. It is a convenient way to travel across London.

You can easily walk to many sites in Westminster from your hotel.

Trains are for daytrips such as Hampton Court Palace, Windsor, Bletchley park.

What you want to see should drive your plans, not 2 for 1 tickets.

Here is the handbook for using public transportation in London - https://tfl.gov.uk/

The 2 for 1 system can take some time to understand. Here's a basic guide: https://www.londontoolkit.com/whattodo/london_travelcard_2for1_discussion.html

Generally, you can qualify for the 2 for 1 deal with a qualifying train ticket OR a [paper] travelcard for the Tube (and TfL buses) issued by a NATIONAL RAIL station. The travelcard will have the National Rail logo on it. Yes, that's a travelcard to be used on the Tube (Underground) and TfL buses, but is purchased at a National Rail station.

At each place you visit where you want to get the 2 for 1 deal, you must have the 2 for 1 voucher forms in hand, along with the qualifying train tickets or travelcards.

The whole 2 for 1 thing has always sounded too flipping complicated for me, and I've usually been in London on my own so it hasn't been relevant. Good luck cracking the code.

If you buy a TfL travelcard (also works for the buses as well as the Tube) at a rail station so as to qualify for the 2 for 1 deals, then you do not need to buy an Oyster card.

Thank you! We already got our Windsor tickets so don’t need it for that but wanted to buy the 2 for 1 for the London eye and Tower of London.

How long are you in London? If it is for a few days buy a 7 day travel card for Zones 1-2 from the National Rail station at Waterloo (Not TfL). You will need a photo.

The 2 for 1 promotion is aimed at people travelling by train to visit certain attractions i.e. you would take the train from London to Windsor to visit the castle so that makes sense.

If you're staying near Waterloo, you won’t take the train (or buy the qualifying train tickets) to the London Eye or the Tower of London or other sights in London. You’ll take the Underground or buses (or walk).

However, you can get a 7 day paper travelcard at Waterloo station and use that instead of an Oyster card that for travel within London, and that allows you take advantage of the 2 for 1 offers.