How to think about it
Guanajuato is small but vertical, so the real question is not distance, it is how many stairs you want to climb with your bags. The center threads along the valley floor; everything else stacks up the hillsides on staircase-only alleys with no car access to the door. Pick your zone by how central, how quiet, and how much climbing you can stomach.
The zones
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Jardin de la Union and the immediate center. The heart of it, steps from the plazas, Teatro Juarez, the bars and the funicular. Best for first-timers and short stays who want everything at the door and do not mind noise. This is where the boutique colonial hotels and mid-range inns cluster, roughly 1,200 to 2,800 MXN a night (approximate), with a few higher-end restored mansions above that. Trade-off: it is the loudest zone, with plaza music and callejoneadas running late. Landmarks: the Jardin itself and the Teatro Juarez steps.
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Plaza de la Paz and the Basilica. Still fully central and flat-ish to walk, a notch calmer than the Jardin. A good middle ground if you want the action a minute away without sleeping over a bar. Similar hotel stock and pricing to the Jardin, maybe slightly gentler. Landmark: the mustard-yellow Basilica de Nuestra Senora.
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The callejones up the hillsides (toward Pipila or the alleys behind the center). Small guesthouses, family posadas and apartment rentals climbing the alleys, often with the best views over the ravine of colored houses. Cheaper and quieter, and where a lot of the character lives, roughly 700 to 1,500 MXN a night (approximate). The catch is unavoidable: stairs, plenty of them, and you carry your own bags up. Good if you pack light and want the view. Landmark: the El Pipila lookout above you.
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Near the Universidad and Mercado Hidalgo. More local, more student-priced food at your feet, and easy access to the tunnel buses and the road out to the terminal. Suits budget travelers and longer stays. Expect hostels with dorm beds around 250 to 450 MXN (approximate) and simple guesthouses from about 600 MXN. Landmarks: the university’s wide stone staircase and the cast-iron Mercado Hidalgo.
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Presa de la Olla and the quieter outskirts. Up at the reservoir at the top of the city, residential and green, where families walk on days off. Quiet, a bit removed, better if you have a car or want calm over convenience. You will taxi or bus into the center. Landmark: the Presa de la Olla reservoir and park.
Honest advice
First visit and you want simple: book a couple of minutes’ walk from Jardin de la Union and accept the noise; you will be tired from stairs and glad the bed is close. Light sleeper: go one street back or up toward Plaza de la Paz, or ask specifically for a room not facing the plaza. On a budget or staying a while: the university and Mercado Hidalgo side gives you the best food-to-price ratio. Want the postcard view and do not mind the climb: take a callejon guesthouse and pack accordingly.
Families and anyone with mobility limits or heavy luggage should stay central and flat by default, because the whole city is a staircase and there are no shortcuts around that. And whatever you choose, during Cervantino in October book months ahead and expect every zone to run 50 to 100 percent above its normal rate (approximate). For where you will actually eat once you have dropped the bags, see food and where locals go.