I'm traveling to the ONP area in late July and booked a night at the Manresa Castle. Then I continued to search online and found alot of bad reviews about the castle being stuffy and unclean. I was thinking about staying in Port Angeles at the Best Western instead. How far are the two towns and for a single traveler, I would like to feel comfortable and safe. Any suggestions on where I should stay between the two places? I need to make a decision soon before everything is booked solid. Thanks!

The Harborside Inn in PT would probably suit you, but Port Townsend is really not that convenient for touring ONP. Port Angeles is very close to the Hurricane Ridge/Lake Crescent areas of ONP, but lacks the historic/Victorian seaport ambience and walkability that Port Townsend has. The two towns are about 45-60 minutes apart. Sequim, which is between them, is probably one of the safest towns on the planet, so you could consider that as well.

Azzure, thanks, but I'm looking for something with character. More rustic than victorian frill. I'll splurge for the night. Someone mentioned the Morgan Hill Loft. Thats more my style. Unfortunately, no vacancy

Is the Lake Crescent Lodge full? What about the Juan de Fuca Cottages in Sequim?

If you're willing to splurge for great views, excellent breakfasts and comfort, consider Colettes B&B or Domaine Madeleine both just a few miles outside Port Angeles.

I know you are looking for frill, but we, too stayed at the Harborside Inn and loved it. We stayed in a room that had a water view and watched otters playing in the water.

The Sea Loft is probably the best place to stay in PT but they are fully booked for most of the summer.
http://www.olympus.net/personal/mortenson/
We always stayed at the Harborside as well (it's pet friendly). You might find that a private water view balcony makes up for a lack of character inside. It's also an excellent location for walking down along Water Street.
Past the end of Water Street by the marina is the Swan Hotel (used to be Swan Inn). It has more character than the Harborside, but kind of short on privacy and the views aren't that great. OTOH, you are right by the marina, which is a great place to be early in the morning.
IMO, PT is a lot more picturesque than PA and also has better restaurants. But PA is more convenient to Hurricane Ridge and Lake Crescent, as noted above.

I just returned from an overnight stay at The Best Western Olympic Lodge in Port Angeles. I was very pleasantly surprised at how nice it was. Lovely lobby, good pool and the rooms were very clean, quiet ,comfortable bed and I thought it was worlds above most motels. Also a great breakfast. I wish I could find something as nice in Port Townsend as I really like that little town. Port Angeles to me is to get up to Hurricane Ridge or over to Victoria.

Have a good trip.