I think I would take the tram as it is closest to your B&B. You could catch the Princes Street stop. Interesting that their directions don't mention it. You might want to ask them about it. Here're directions on how to see the Kelpies.
You're in a great area. Just down the road in Charlotte Square is the Georgian House. It' s one of my favorite sites to visit in Scotland. It's not cheap, but great seafood at Fishers in the City. They Arbroath Smokies which are really tasty. Also good is the Mussel Inn. There are lots of other restaurants in the immediate area.
If you are an Ian Rankin fan do not miss The Oxford Bar.