Using Canaletto's 1747 painting as a reference point...
In the centre is the Augustus Bridge which crosses the Elbe at the 'oldest' parts of Dresden. To the left, you see the top of the Frauenkirche (Church of Our Lady, rebuilt from rubble) and in front of it the Terrasenufer (Terrace Shore, rebuilt from rubble). In that area of Dresden you will find the 'twisty bits and narrow passages' that evoke Desden's classical heritage.
This area also has Dresden's famous Christmas Market in the 'Old Market Square' (rebuilt from rubble) about 200 yards from the bridge (near the spire to the left of the painting's centre). There's a Holiday Inn on the next street.
If you take the bridge in the other direction, you will head up to Albert Square, which offers more churches and some regal structures along the way (many of which were rebuilt using old photographs and architecture documents).
The foreground of the painting, where you see some people, is now a sculpted pedestrian walkway populated with museums and ministerial buildings, also rebuilt to epic style.
For your concern about not wanting to walk too far, you can get from the bridge to the Christmas Market in about 5 minutes, and to the Frauenkirche in about another 10 minutes. On the other side, from the bridge to Albert Square is about 20 minutes.
For your question about hotels, the entire area is packed with hotels of every type. The Ibis Budget is about 10 minutes south from the 'Old Market' by foot. And on the other side of the river, the Buelow Palace is about 10 minutes south west of Albert Square.
Generally, any hotel within a 1/4 mile radius of the Augustus Bridge puts you in good shape to see the best architecture in 'historic Dresden'. Dresden is in a river valley and I don't recall any tall hills in the area, but they would be well away from the city centre anyway.
Adding: To orient yourself, here's a map of modern Dresden where I have placed a red dot at Canaletto's approximate viewpoint when he made the painting.