Middle of nowhere? Come on be realistic. It's an 8 minute drive from downtown and you're within 1 minute from shopping or restaurants.
As for arena size, yes that will be a disadvantage, but it only depends on who else goes for it. I know it's a different ownership group, but the last bid from the Sting to host was to add seats around the ends for the extra space.
As for hotels, There is 6 in Sarnia not counting the motels on the golden mile. As for overflow, there is Port Huron, Chatham or London. As for how many rooms they would need, that I don't know but Sarnia has hosted big minor hockey tournaments in the past without that being a huge issue. (Silver Stick, World U-17 Hockey Challenge, Battle of the Border)
IMO, If London tries to host, they will get it. But if they don't, I think with the team Sarnia is projected to have, they have a chance, but I would not hold my breath. Most likely, it will come down to whatever team guarantees the CHL the most money. I do know that was a reason we did not win a previous bid.