Interesting point about being able to deduct a hotel stay paid with money, but not one paid with points. I'd be tempted to use Hotel Points too because it would make the route seem more profitable, but that might be artificially inflating your sense of how much the route is worth.
I don't have much route experience, but I find that the first time I do anything new, it's best (for me) if I don't try to worry about making it profitable. Profits are for the second time. Now, that's a little easier on one off shops where I don't have much out of pocket and may not be applicable to a route, but I'd be inclined to save those points, find a cheap hotel and deduct the cost as a business expense. Then, at the end of the route, you'll have a good sense for what kinds of shops you like to do (lots of the same kinds over and over again? Or does that make you mix up the details because they're all so similar?), what kind of profit you'll need to cover expenses and make a good return, plus a bunch of other stuff.
Good luck! I hope you'll let us know what you decided and how it goes if you take the route.
Shopper in California's Bay Area