Good luck finding somewhere to stay, most hotels will be booked by now. You can try out by the mall (east of town), there are a few out there that might have something. Other than that, try for one of the small towns around (assuming you will have a car while there) - Bellefonte has a few and theres always Altoona, about 45 min away if you are really desperate.
The tailgating set up there is pretty cool IMO, they have it all in the ag fields right by the stadium so its a nice setting and close to the game. However, you have to get there ridiculously early to get a decent spot and not get stuck in traffic. Under absolutely no circumstances should you attempt to approach the stadium/tailgating in a car from the south or west anytime after 11am (yes even for an evening game). Best way to get to tailgating/stadium is down Fox Hill Rd if coming from the airport or from the east along Park Ave or E College Ave.
Someone mentioned The Creamery, thats an abvious attraction but again, beware of lines because every single PSU alumni in town feels it is their sacred duty to eat Creamery ice cream while in town. If you have a car and some time to roam, Meyer Dairy actually has better ice cream and prob shorter lines (a few miles S of campus along S Atherton). The whole campus is pretty nice for a wander, if you are stuck on foot
(BONUS there is a Buckeye tree in the middle of campus that no one knows about, along Pollack by Davey Lab. it might be a bit late for buckeyes at that point but you may be able to snag a few)
Food/bars - American Ale House (few miles north of campus) is the best restaurant around but again, is a big PSU alum draw so reserve/call ahead/be prepared to wait. All the campus bars are centralized between Beaver Ave and E College Ave along the SE edge of campus. The northeast end of that strip tends to be more frat-bro hangout, the SE end is a bit more aclectic. Kildare's is a good Irish pub, The Saloon is nice, if small, Bells' Greek Pizza sells late night pizza by the slice, Darkhorse Tavern is hard to find but has great wings, Rathskellar is another good bar/food hangout, avoid the Phyrst at all costs, Pickles is fun, a bit crazy, Zenos is a great dive bar with the best beer selection in town.