Saturday is the best day if you are looking at all the cars. If you are hunting parts; early bird gets the worm! Friday is also nice, but a lot more cars show up for Saturday.
Nearby hotels, there are a lot, but you may have trouble finding one close by at this point. Some people cancel rooms just before the event so sometimes you can sneak in if you call at the right time!
Neil, if you have never been this may be the right year with the 50th celebration for the Mustang! It is quite the experience... but bring your walking shoes!
Danny