A couple of times we stayed at the Holiday Inn Express in Alcoa on the way down to the Rally. Reason being, is that I used my points for a free hotel room. Was cheaper than Fontana. But, you have atleast an hour drive to the start of the Dragon and another half hour drive to Fontana.
If you would like to partake in the "good" activities, it'll be hard and not so fun. When you're done and ready to head back from Fontana, it gets dark out there... Well, not so much dark and in PITCH BLACK! Unless you have a portable sun strapped to the front of your bike, it'll take you close to two hours back to Alcoa.
You should be able to share cabin space with someone or split a room. Costs would be cheaper than paying for a hotel AND you'll be able to part take in the endless debauchery that happens into the night (So I've heard...;D )
if it were to take you an hour to get from Alcoa to the dragon, perhaps you should rethink riding the dragon. 30 minutes tops. I can make it from my house in Lenoir City to the dragon in 45 mins and I am much further away.
BTW if any local guys want to make the daily commute to the dragon together, give me a shout.