If you think you want to go to another Bele Chere, 2013 may well be your last chance. I have not heard about the possibility of Bele Chere being moved, although I guess it is a possibility. The more likely scenario is it will be scrapped since the city is removing it from the budget. That leaves them looking for private funding, and given its track record financially and the potential liability, that is unlikely to happen. So, it is probably "now or never."
We don't get anywhere near downtown during Bele Chere, so I can't help you with anything but the last question. To sound Clintonian, it depends on the definition of "close." "Walking close" is going to be a downtown hotel. The Aloft, Hotel Indigo, Haywood Park, the Renaissance are all downtown.
But, while I have not stayed there (and I live here, so why would I?), everybody I have talked to that stayed at the Grand Bohemian was quite happy. I've been to the bar there and also eaten at the restaurant, and it seemed quite nice. It is probably 2 - 2.5 miles from the festival. They run shuttles to and from Bele Chere, but I don't know where they originate or the route.
A bit of a funny story about the Grand Bohemian. I travel a fair amout for work. One week I was returning home on a Thursday afternoon and was seated next to a woman who was visiting Asheville with some friends (also on the plane). I remember it being late winter. She asked me a bunch of questions about where to eat and such, and said they were staying at the Grand Bohemian. The following Monday I was heading out again, and wound up seated next to the same woman on the outbound flight. It had snowed during their visit, but it had not slowed them down. She said they loved the Grand Bohemian.