I liked my stay in Hotel Shelton, and would recommend it for travelers who don't require 'luxurious' settings. I thought the service was excellent, and they have a good rooftop lounge/restaurant with good food at reasonable prices. The bed was nice, with clean sheets, the TV service was fine, and the bathroom was spartan but fine (as long as you are OK with short 3-4min showers). It could, however, have been cleaner; for example, the floor-rugs were filthy, they hadn't been beaten out for perhaps years, so I hid them under the bed. But my feet still kept getting dirty from walking on the floor, so I ended up grabbing the cleaning gear myself and mopping. They also have a lift which only works about half the time, so I avoided it in case I got stuck!
About the area, Paharganj is not a slum, but it is still quite a poor area. I never felt threatened - I am also a 90kg man - but you will be hassled by beggars and 'touts' trying to get you to take an overpriced trip to the Taj Mahal, and the streets are very crowded. But there is lots of good, cheap food and plenty of shopping, and it is central, close to metro and train stops and just 10mins walk from Connaught Place, which has lots of shops and restaurants. Also, Paharganj is very loud most of the day, with horns blaring, but this subsided by about 11pm and didn't start again until 9-10am, so I slept well, although light sleepers may struggle...