I'll give you DebitNM's favorite place in San Francisco and that's the Mosser Hotel. Unfortunately, no free parking, but it is very centrally located.

http://www.themosser.com/

At times, Debi will post their specials here on Fodors, so look for their special packages and you might get better rates.

San Francisco is not that big a city. Personally I don't believe you have to stay cheek-by-jowl next to the university itself but that's just my opinion.