Sorry - missed your question in the flurry of posts. The Hotel you speak of from the previous public release was 160 rooms - the current Hotel proposed is 500 rooms. (So you are correct - 500 Rooms total in the initial phase).
With respect to your comment about "the worse use of Lakefront" have you studied Boston or San Diego as a point of comparison. IMHO both examples show how public dollars created new private investments is areas deem "away" from the City Centre and created the access to the waterfront you appear to desire.
The Flats site is too important to lie dormant now. It is the type of leveraged investments we should be seeking from all proposals for the use of public dollars.