If traveling from Santa Fe do we need to spend the night?

Yes, absolutely

We stayed at Cortez, Colorado... The Retro Inn, very clean and $69 a night for 2 Queen beds. A person could easily spend 2 days there if you wanted to see it all.

I would personally. It will take you 4+ hours to get there, then at least a few hours there. Durango is a good spot to stay that is inexpensive and fun. Well worth the trip!