If I book an upscale hotel room in a major city and I live in the same city (my credit card address will reveal that), does that raise any red-flags with hotel management? Do they get suspicious of hobby activity or any other activity? Is there any concern there, or am I just being paranoid?
You are just being paranoid.
Maybe your house or apartment building is being worked on or is tented and being fumigated. They don't know.
I have a friend who's wife frequently invites a number of exchange students into their home for events every so often. When the house fills with kids, he heads to the hotel for the duration so he can get some peace and quiet.
The hotel doesn't care. As long as they get their money, and you behave in a respectful manner, they are happy to have you.
How will the hotel get your credit card address? It's not printed on the card.
When you register at any hotel, they require your billing address and they swipe your card.
... Better be sure your wife or SO doesn't see your credit card bills, though. That same-city hotel stay may just bring up a few questions.
Chicago has a lot of adds from hotels encouraging people to get away for a day. Hotel's love the weekend revenue because that is typically their slow time.