Stay at a hotel in St. Mark's. The Cavaletto is nice. Get to the ship by water bus or water taxi. Get to the ship as late as possible, because you'll be on the ship for days but you'll only be in Venice for hours, and Venice is a lot more interesting than the ship.
Venice is the most magical city on this earth. I agree with the other two posters, stay around St. Marks. There are some quite reasonable hotels nearby. The Hotel Kette and the Columbine come to mind. If you want to stay more upmarket, there is the Metropole, Monaco and Grand Canal, Hotel Londre, Danielle etc.