I've done the whole trail south from Simsbury to New Haven too. Paved, with a couple of road sections which are fine-- it can get a little crowded on weekends, but keep yelling "on your left" when you need to and everyone clears out for you. The further north you go the more rural and less crowded it gets. I'd eventually like to do the whole route from New Haven to Northhampton (past Westfield it's roads, but I find drivers in New England are generally courteous with bicyclists) and then take the train back with my bike.
Simsbury has hotels right on the trail I know... not sure about south of there. But there are plenty of restaurants scattered along the trail, even a microbrewery in Southington, CT!
A great loop ride combines the Farmington Canal and Farmington River trails, about 38 miles (and the Farmington River part is flat out beautiful). If you start at the south end, Simsbury is a perfect lunch stop with tons of options for food.