I just returned from Iowa City after dropping off my daughter (no pics) for her sophomore year at Iowa (how she ended up at Iowa is a long story). So, while my experience is limited (3 visits total) here are some thoughts.
Hopefully you already have hotel reservations, because like a lot of smaller college towns the good options are limited and on football weekends you have to be prepared to pay. The Hotel Vetro, as AI mentioned, is in a great location and is a cool hotel. We stayed there last weekend but right now the rooms for the Michigan weekend are running about $1,300/night. But they may be one of the only places that still has rooms available.
As far as restaurants, we mainly stuck to the downtown spots and enjoyed St Birch Tavern, Pullman Bar & Diner, Basta, and Vue Rooftop (didn't actually eat here but had some drinks and enjoyed the view over the city). Micky's Irish Pub has a good Chicken sandwich and a good beer selection. And I will second AI suggestion on Big Grove Brewery as they have really good beer, good food and is a cool place to hang out.
We went to a game last fall and enjoyed it (and admit that I thought the "wave" was cool). I can't offer much in terms of tailgating advice as we pregamed at one of the sports bars downtown to watch the Texas/TTech game. But there were tailgates all strown about, even in the parking lot of our hotel (Mariott Courtyard right across from the stadium).
All in all I think it's a cool town to take in a game in the fall.