It depends on the kind of experience you're looking for... If you want to be able to walk to/from shops and restaurants in Portland's Old Port waterfront area or feel like you're "in the middle of things", Portland would be the preferred location. If you simply want a decent, clean place to spend the night with perhaps at 10-minute drive to the Old Port area, plus easy access to/from I-95, South Portland may work just fine and save you some money while you're at it. The biggest downside to staying in South Portland, beyond the need to drive back to your room afterwards, is the need to find a parking spot once you get to the Old Port -- can take a bit of patience at times or a willingness to pay for garage parking. The South Portland locations we're most familiar with don't have much within walking distance; they're designed to provide easy-access overnights for folks visiting the Maine Mall Shopping Center, flying to/from the airport, or working at nearby corporate locations. Am not sure what it takes to constitute a "buzzkill" so don't know how to respond to that part of your question.
I’ve stayed in both areas. It’s a trade off of convenience and being in the heart of the action v. cheaper prices in the outskirts.
My advice is if your main priority is going out in the evening to enjoy nightlife, stay in the Old Port. The higher hotel price is worth the convenience of being able to walk wherever you are going and being able to walk back late at night without having to worry about a commute.
If your plans are sightseeing, shopping and a great dinner followed by an early night’s sleep, save some $ and stay in the outskirts.