Nothing in the Barrio Historico is more than around 3 blocks away from this well-maintained and serviced place. And staying overnight in Colonia is a different experience that visiting as part of a day trip from Montevideo or BA. Staying two (or more) nights lets you experience the daytime life and the quiet, relaxing evening. Don’t get bored, get relaxed.
As for the Posada Plaza Mayor, it is walking distance from the ferry and bus terminals but, dragging a suitcase over the cobblestone streets and some gravel may not be the highlight of your trip; a taxi was 150-200 Uruguayan pesos.
Most of the rooms are off a shaded interior courtyard, which adds to the feeling of being in a different time. Staff is friendly and helpful. I traveled alone and stayed 3 nights in Room 4, which was comfortable for me but would probably be a squeeze for two. Other rooms I able to see inside while housekeeping was at work, unlike 4, have enough room for a chair; I had just the window seat.
With that caveat, I recommend staying at Posada Plaza Mayor, not just visiting Colonia del Sacramento for a day.