Hohenschwangau or Fussen?

We stayed in Fussen, but we had a later arrival and did nothing other than eat and sleep there. For that purpose, I do think that Fussen offers a better selection of Hotels and restaurants, plus that is where the train ends.

Füssen and Hohenschwangau are only about 5 miles apart and connected by regular buses.

I think the hotels right in Hohenschwangau are probably the most expensive, but there are some reasonably priced places in nearby towns, like Horn and Schwangau. Just make sure they are either within walking distance of Hohenschwangau or near a bus route to Hohenschwangau.

Horn Schwangau is WONDERFUL!!! big open pastures with the cow bells clanging, bike paths (and the hotels have bikes), Crystal Therme spa and pools. There are many hotels dotted around the area. We've stayed in both Hotel Ruebezahl and Hotel Helmerhof with nice big rooms, views to the castles, exceptional restaurants at both hotels. It's the best of the best area to stay at the castles.