It is possible hotels will be added, as I think a few were last year, but not definite, and there aren't any close in hotels that aren't already in the block. Last year when hotels were added, they were in the airport block.
You can either, book out of block, just using hotel website, or a place like Priceline or hotels.com, or some such; or you can book in block, but far away. What I would recommend you do either way is call the housing bureau number on the passkey site, and request to be put on the waitlist for a closer, downtown hotel.
Last year at the Gen Con feedback seession (which I really recommend you guys attend, and which was poorly attended last year), Owen said that even as late as a week or two before the Con, there were some rooms in downtown in which they could have put people off the waitlist. Now, they may not have been your first choice, like the Mariott, but they were downtown. Of course, by then, lots of people already had reservations elsewhere that they couldn't cancel without penalty.
If you reserve in the Gen Con block, and the housing bureau "moves" you, you do not pay a cancellation fee for the change in reservation. So it's a gamble to take the farther hotel and wait and see if you can get a closer one off of the waitlist, but it's not an impossibility.
If you absolutely must have a hotel downtown however, I'd say your best bet would be to book out of block; the Westin and the Conrad were showing availability last time I checked.
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