You don't HAVE to tip your waiter, but don't expect good service when you come back (if you do). Servers in the US don't make a lot of money aside from tips, it's a different story when you talk about McDonald's, Burger King or Wendy's.
The week-long MTA/Subway card may be a good idea. Keep in mind that Times Square is also the "theater district" so rooms may not be cheap and may be hard to come by. Another option is to stay across the river in NJ and take the train into Penn Station. Unfortunately, I live much closer to Saratoga than NYC so I can't provide a lot of advice on hotels near Times Square.
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