I have been to the canyon many times and have stayed in all the lodges there at least once. I would recommend staying at one of the six lodges that are actually inside the park (as opposed to the ones outside the park gates at Tusayan) as staying in the park makes it much more convenient to go between your room and the rim anytime you want and thus make the most of your time at the canyon.
As for which of the six lodges... it depends on your preferences and priorities. The most famous (and most expensive) is the historic 1905 El Tovar Lodge which is one of the famous grand old lodges of the park system and has a great lobby with a big fireplace. It has been recently rennovated and while all the rooms are nice, many of them are pretty small and basic by modern standards. Probably the best hotel rooms in terms of modern furnishings are Thunderbird and Kachina Lodges (although they are pretty boring). Bright Angel is the cheapest (some rooms have shared baths). My personal favorite these days is Maswik Lodge - the rooms are not fancy, but they are good sized, reasonably priced and it is one of the few lodges where you can park right by your room.
All of the lodges are ran by the Xanterra company and you can make reservations online (see link below). Make reservations well in advance.
While at the canyon, be sure to take in all the overlooks - each offers a different perspective on the canyon. Sunset and sunrise are the most dramatic views because of the shadows and golden sunlight. The free shuttle running from the lodges out to Hermits Rest and back stops at the various overlooks along the way and is a great intro to the canyon. Also be sure to check out all the historic buildings... aside from the above mentioned El Tovar, there is also the 1905 Hopi House curio shop, Lookout Studio, Hermit Rest and the old Kolb Brothers Photo Studio (which often has free art exhibits).
I would highly recommend that you take at least a short hike down into the canyon - even if just a half mile or so down one of the main trails. Being inside the canyon with the walls towering above you is a very different - and in my opinion more rewarding - experience than just staying on the rim. Be sure to carry plenty of water, wear comfortable shoes and remember it is much harder and slower coming up the trail than going down.
As far as other sights nearby... Flagstaff (the main town to the south) has a neat historic downtown area with lots of little shops and cafes. It is also home to the excellent Museum of Northern Arizona and Lowell Observatory (where Pluto was discovered in 1930).
Northeast of Flagstaff (on the way to the eastern entrance to Grand Canyon at Cameron) is Sunset Crater and Wupatki National Monuments. Sunset Crater is an extinct volcanic field with lava flows and cinder cones and Wupatki is a large prehistoric pueblo ruin that you can walk through - both are excellent, but often overlooked. About an hour and half east of Flagstaff on I-40 is the Petrified Forest National Park (acres of giant stone logs) and the Painted Desert.
To the south of Flagstaff, is Sedona and Oak Creek Canyon (with the famous red rocks and resorts) and the old mining town of Jerome on the slopes of Mingus Mountain overlooking the Verde Valley. Along I-17 near the turn for Sedona is Montezuma Castle National Monument - a major cliff dwelling.
As for the best time of year to visit the canyon... there really is no bad time. Summer is the most popular time for tourists and the weather is nice, but the crowds can sometimes be a hassle and make parking difficult. If you are going in summer, you may want to consider going to the less developed and less crowded North Rim instead (the North Rim facilities are closed the rest of the year). Spring and Fall are nice because the weather is still good and the crowds are fewer (this is prime hiking season). I really like the winter when rates are low, crowds are few and the canyon seems very peaceful (and very pretty if it gets a fresh blanket of snow).
Keep in mind that the canyon (and Flagstaff) are both at an elevation of 7,000 feet which means that (unlike much of Arizona) they have very mild summers (never breaks 100) and real winters with snow storms and below freezing temps. Dress accordingly depending on when you go.
Have fun!
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