Each year my 2 daughters (late 20's), my sister and I (50's) take a 4-6 day trip. This year it will be Philly.
I can get a good price for a hotel via hotwire, however, I am not sure of the location. We will have one car and understand parking will be pricey, but for the bulk of our sightseeing and dining we would like to leave the car and walk or take public transportation. We would like to be in the heart of everything with safety in mind and close to everything. Any suggestions as to which neighborhood? Such as: Downtown, water area, etc. Thank you.

Not sure what hotwire would mean by Downtown, but I'd be very surprised if it wasn't fine. Waterfront, on the other hand probably means Penns Landing, which is less walkable, especially at night. There are some decent hotels, but it is somewhat insulated from surrounding neighborhoods by the ill-advised placement of I-95, and can be fairly deserted at night. It is livelier in August than at other times of year, as there are bars and restaurants on the waterfront that are open seasonally, but those can be a draw for a slightly rowdy element. This is not an area I'd feel really comfortable walking alone in after about 11pm (woman in her 40's, grew up in NYC, usually pretty ok about walking in cities at night).
Your best bet is probably Old City or the Rittenhouse Square area, as they are both upscale mixed commercial and residential (Rittenhouse Square is considerably more upscale, Old City is a bit funkier) with a lot of nightlife, and there should be people on the streets until quite late.
Have you tried Expedia or Hotels.com? It is often possible to get good prices on hotels in Philadelphia, and that way you could pick your area.

We were there in Sept.

Anything between around 3-4th and 12-14th just below Market would put you in the middle of it all.

We just got back Sunday, having stayed in the Convention Center area at 12th and Market.

There are tons of hotels, some with suites and kitchenettes, always convenient, and you are very near Reading Terminal Market and Chinatown, both sources of good things to eat at low prices.

It took us about 15 minutes to walk to Rittenhouse Square, window shopping all the way, and ten minutes to walk to Independence Hall. It is not hugely convenient for the museums, but taxis were reasonable if you don't want to drive. Macy's (ex John Wanamaker's) is on the corner next to City Hall and is not to be missed, even if you don't like to shop ;-)

My hotel, while fine, would not be as good for a group as some.

thank you for the responses, also if anyone could tell us which is the BEST Philly Cheese steak place and fine dining restauants for our "final night" Thanks again

I stayed near Rittenhouse Square at the Courtyard there. Got in on Priceline dirt Cheap.

The one restaurant we went to was Dinardos for Seafood. Very good but expensive.

Best cheesesteak is a very, very hotly debated topic, but the universally accepted contenders are pretty much all in South Philly. If you don't want to venture that far, there is a perfectly acceptable place right on Market in Old City, the name of which always escapes me. This is heresy, but since it is THE civic dish, most places that specialise in it do a fairly decent job.
What are you looking for in a fine dining restaurant? We have many very good ones, and in fact the general quality of dining out in Philadelphia is high. I'm particularily fond of City Tavern, but that's just my pick.

I think you're thinking of Campos, persimmondeb.

Yes, that's it! Thanks. Always found them to be quite decent.

We walked down to Jim's. Just 10-15 minutes walk from Market.

Cheesesteak was excellent.

The ordering process was surpisingly civil and they even have an upstairs room with tables and chairs. Not fancy but at least it's not slopping all over you.

I second the recommendation of the area near Reading Terminal Market. Lots and lots of restaurants and shops nearby and you can walk to quite a few neighborhood/attractions (including the Liberty Bell). I stayed at the Marriott recently and the beds were insanely comfortable.

Thank you everyone, have looked into the Omni, but a little out of our price range. I do not have a good map of Philly, yet sent away for one. Can anyone tell me if the Embassy Suites is in a good location meaning close to everything. We want to be able to walk to most things. Thank you.

We decided to book the Courtyard in Downtown Philly, (Marriott). I originally went to Hotels.com and the price they quoted was $251.00 higher than if I were to book directly with hotel. So I booked directly, was able to get points. Location excellent and great reviews. Very reasonable. Thank you all for input.

Interesting outcome re: hotels.com. But I do always check the hotel websites directly before I book via discount site. Good thing you did.

That is the Courtyard that I stayed at. Its in a perfect location. Just leave it and walk / public transportation is perfect. Not a bad walk to Independence Hall. It was $35 per night parking so that is quite pricey.