Matt H.
Yelp
Key West is going to be expensive -- especially in winter, especially for a nice room. Expect to pay $300 minimum for a room of any quality in the high season with premiums for a boutique hotel in a convenient location.
For my money, Fitch House more than justifies its price. It's a five-minute walk from the Dry Tortugas (Yankee Freedom Terminal), which you must be at early and rested (and earlier and more rested if you hope to snag a no-show ticket). The bed is comfortable, the breakfast sumptuous, and the service excellent (thanks to Richard, Sky, Monica, and the night desk woman whose name I did not catch).
In Atlanta, the price would be too high: in Key West, it's just right.