Your question is sort of like "we're going to Florida, y'all know a good place to stay?" It matters which "sights" you intend to see. The LA metro area extends from San Clemente in southern Orange county to San Fernando Valley in the north and from Santa Monica on the coast to San Bernardino in the east. This is a ridiculously vast area in terms of both distance and (more importantly) time.
Traffic can be insane in LA and Orange counties; locals know there are certain times of day you simply cannot drive. Think about where it is you want to go and when you want to go there. If you stay close to those places, your life will be simpler. Alternatively, if you will be driving AGAINST traffic, you'll have a lot less stress than driving with traffic. So if you stay in LA county and drive to Orange county every morning, it's a much easier commute than to stay in Orange county and drive to LA.
Having lived there for several years, I'm a bit partial to Long Beach. In the past twenty years, the downtown Long Beach area has really been cleaned up. ("downtown" being the vicinity of Ocean and Long Beach Boulevards) There are plenty of nice restaurants and hotels, although the latter will tend to be expensive. Be aware that in a distance of a few blocks you can go from an upscale neighborhood to a very bad neighborhood. This is true in general in LA, but it's particularly true in Long Beach. If you stay within a few blocks of the beach you should be OK pretty much anywhere. And if you're going to LA, you might as well stay close to the beach.
If you plan on visiting Disneyland, then I suggest you look at the nearby hotels; you can find reasonably priced places close by.
If you're bringing a big crew, definitely look into one of the extended stay places like Residence Inn. These have kitchens which can save you a lot of money, not to mention free breakfast and happy hour.
A few sites which aren't so well known but well worth visiting: The Gene Autry Museum, now known as the "Autry National Center" is a must-see for western history fans. The Huntington Library in San Marino is also quite interesting if you like art and/or gardens. For a short scenic drive, follow the coast south from Redondo Beach around the Palos Verdes peninsula to San Pedro. If you have time for a longer drive, the Angeles Crest Highway across the San Gabriel mountains is fairly spectacular.