There are several Hotels in Darmstadt or Darmstadt-Eberstadt, varying in cost and comfort. If you travel to the event by car, all of these are only a maximum of 25 minutes away from the castle and double room prices vary between 30€ and 60€ per person and night. Use any of your favorite online search engines to find one you like. There are no “bad” or even “dangerous” areas in Darmstadt.
I recommend hotels in Darmstadt especially if you plan to stay the night from Saturday to Sunday, as I am sure some more players will stay and jam some more Old School, like the yet to be announced Chaos Orb flipping contest in one of the bars of Darmstadt the late evening after the main event on Sunday, or the yet to be announced Premodern event on Saturday and premodern-sets Chaos Draft on Saturday. At the moment, the main event will happen from 11 AM to roughly 8 PM.
If you travel with public transport and like a short, but steep walk (20-25 minutes) in the morning, I recommend Hotel Malchen on the west side of the castle hill. It is easily reached by car and public transport, but the rate is considerably high at 60€+ per person and night.
If you travel by car and want to decide whether to walk or drive up to the castle in the morning of the event, I recommend Darmstädter Hof on the east side of the castle hill. It is difficult to reach by public transport, but the rates are considerably low at 28€-40€ per person and night. It is worth noting that they are mainly a restaurant, so have only 3 double rooms and 4 single rooms available. Their website may hint that it is located in a small village and family-run.