Sorry about that.
Well, there are two other nice hotels in that area, but I just checked and they also have minimum 2 night stays on weekends during the summer.
I also tried the Best Western All Suites Inn and the brand new Holiday Inn Express. Even though these two are not near the water, their summer weekend two night minimum is in place.
You will probably run into this all along the coast.
There is a motel two blocks back from the bay which looks available without the two night minimum.
From here you can walk to the Municipal Wharf. You could have dinner there or at the Dream Inn, in its lovely restaurant, Aquarius. Locals don't often recommend eating at the Wharf, since tourist prices are in effect and the quality suffers. There is an exception, a small restaurant called Riva Fish House. They have view tables, do not take credit cards.
This is not far from downtown and the main street, Pacific Avenue, which is full of boutiques and restaurants, many of them with sidewalk seating. It is a pleasant, tree-lined street.
Edited: 11 June 2011, 9:40