If you are going down the Hotel/B&B avenue you might want to look at Shepton Mallet rather than Glastonbury town, as Shepton is actually closer. Trust me on this as I live in Shepton.
You need to be quick though as places are filling up quick... I work at a place with 8 rooms and 6 are gone already even before the ticket deposit day!!
Buy your parking ticket when you complete your ticket payment. If you need a list of places locally, I can get a good list together for you. It won't work out particularly cheap, though as places do tend to bump up the prices for that week. Generally the best option is to get in early before they wind prices up too far.
Good Luck on whatever you decide to do.