Agree with your wife.
Don’t know the school, but if you find a hotel in the nearest nearby city or town (20 or 40 mins away, if there’s a sizable place), you likely won’t have sticker shock - and the schools typically give a specific move in time or window - and have that part handled - so I wouldn’t worry about everyone coming at once - plus some come late or early (with permission) depending on the situation.
Of course, if there’s not another town within 50 miles, I get it - but otherwise agree with your wife.
When my kid graduated, hotels near school were $400+ and I stayed less than an hour away on 5K Hyatt points - and I think they hotel rate was like $125 or so.
So if you have that type situation - you needn’t blow the budget.
Good luck.