Most of the decisions relate to your family's budget, so there isn't a 'one size fits all' answer. If you have never stayed in Annapolis, need to know that some downtown hotels have no onsite parking (you park at a public parking garage, but logistics of luggage, etc. can be challenging) or many charge for parking, so be sure to inquire when making a reservation. Rental car gives you much more flexibility, since you can't plan every minor trip ahead of time. The cost of whatever taxi service you use will be greater then the cost of a rental car if you make even a few trips. Hotels that say 'walking distance to USNA' can still be quite a distance as it depends on how you define 'walking distance'. Motels near the mall have free parking, much cheaper and you are still just a short drive to USNA. Some of those hotels also run free shuttles to USNA.
Most of these topics have been covered in several older threads you can find by doing a search.
Most of these topics have been covered in several older threads you can find by doing a search.