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iceland stopover oct

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we will be stopping over in iceland for 3 nites on our way to paris in late october arriving at 7am. . i realize this not the best time but it was the best price for a one way flight with a free stopover.
we would like to the golden circle , go to blue lagoon and see some sights in reykjavik. we will be renting a car probably from SAD since these are the cheapest rentals -hopefully reliable
would like to stop at blue lagoon after arriving -any thoughts about staying at he hotel affiliated with it or should we stay in reyjkavik or somewhere else
how long to do golden circle-one or 2 days and any suggestions where to stay-
appreciate any help or suggestions
thanks

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