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London areas to stay in

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Planning a 6 night London 6 night Rome trip Leaving LA October 4th. 28 year old couple with an 8 year old child. My budget for hotel in London only I'm hoping to stay around $1500-$1700 USD. I'm finding some in Paddington and by Hyde Park, wondering if these areas are "far" tube rides or not good areas to stay to sightsee or if there's specific areas that might be cheaper not right on the Thames, or what areas I should stick with looking. I want the best hotel for the money but don't want to be too far out of the "main tourist area" (unless I do want to...never been to Europe, you tell me).

Also I was considering renting a car and exploring castles outside of London and the countryside. Advice of where to go, how far I need to go? Would it be better to stay one night outside of London and do a self guided car tour around England?

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