This is run by a very nice family. Everything is clean and recently refurbished. The exterior and interior walls are all freshly painted, crown molding was installed, and all the flooring is brand new, too. There's Dish TV and a quality wifi system. They've done a commendable job updating this old motel on a modest budget. Our two room suite was on the cozy side. Our room rate was lower than most other local alternatives, so it's an acceptable trade off.
I didn't like the beds, my wife and kids said they were fine. I would suggest to the owners to add door mats; we tracked a lot of beach sand into the room. There is a mini fridge, microwave, and coffee machine. The check in office has an ice machine, but there is notably no water cooler. Bottled water and sodas are available for a modest fee.
Morro Bay isn't very large, so even from the edge of town, it's just 5 minutes drive to the embarcadero and even less than that to get to Morrow Strands. The former is great for walking and shopping. The latter is gorgeous and spacious. Day use parking at MS is free.
There are a few nicely rated restaurants nearby. I would recommend driving to them; Main street has poor visibillity at night, lots of people driving above the speed limit, and it's hard for drivers to see pedestrians.