Hotel
Due to the new date right after the 4th of July, there is less availibility. With the link below we'd recommend for a... Simple Option: Coratel Inn & Suites (close to Pond/walking trail) Fun Options Close to Art Walk Downtown: Arch & Cable Hotel or Hilton Garden Inn You may want to check out St. Peter hotels as well!
Discount Code - Use the "View" link for discounted rates on various hotels
House Or Rental
There are also quite a few house and apt options in Mankato & St.Peter, check out on Airbnb! The one linked has option for 8 people.