@Josiah0
I have NO background on dealing with that specific type of situation BUT I have been the 2nd gen owner/operator of a six unit summer cottage colony on Cape so have to deal with town inspections and license, etc. so that's why i decided to answer.
I would find some of those requirements highly unlikely to be met by existing commercial B&B's in your town IF there are any, or all places that are available to rent on long term basis. Such as the ADA, landline, door locks, unrelated occupants, etc.
So I'd maybe investigate that aspect - "as in why us, and not them?"
Your second point in 'how will they track STR" is something that i mentioned at public hearing on STR a while back. If it's casually rented by CraigsList, I don't know how they will find it or how DOR would either.
Paying those fees seems reasonable as I pay $120 (i think it is) yearly.