183 and i35 is not the worst area of town, but it is next to the worst area of town, Runberg and 35. Put this way: When Austin decided to install eye in the sky crime cameras they put them in that area and that area only.
I'm not saying you can't find a decent hotel there, but your odds of finding a terrible on are going to go way up.
If there was even one review saying it was disgusting, it's probably right. That area sucks.
Edit: Here is the "cheaper" place I would recommend. http://www.ichotelsgroup.com/candlewood/hotels/us/en/austin/aussb/hoteldetail Its 90 a night if you register early. You can probably get a cheaper rate if you call. And if you get 5 people staying there you can get a group rate (probably only about 10 bucks off a night).
Things in the Arboretum are going to cost ~20-30 more than i35, but your peace of mind is probably worth it. I would doubt if you are going to find anything less than 65 in the city anyway. Again, you can probably find a perfectly fine place on i35, but you would definitely roll the dice.