I read the ad and see it the same way. It clearly says 5 nights for $217 per person, double occupancy.
They intend for it to mean, 5 nights for $217 per person, PER NIGHT, double occupancy. Which doesn't make any sense either because then the room would be $434 per night?!?!?!???
It SHOULD say 5 nights for $217 Per Night, Double Occupancy. Blah, blah...additional charges apply if more than 2 people stay in the room, blah, blah, side effects include heartburn, indigestion, anger and ruined vacation, blah blah.
Problem is now that there is no way in heck they'll change it because now they have to prove they are "Right".
They need to do the right thing and change it to avoid further complications. After all, they are in a 'service' industry. Showing they are willing to change the ad would demonstrate that they are willing to work with people. They'll get a lot more mileage out of being flexible than they will standing firm. Mom always told me, you catch more flies with honey than you do vinegar and do unto others as you'd have them do unto you...
I'm sorry for your troubles and experience, but it seems like you learned a lesson the hard way that we can all benefit from. Avoid this dive operator/hotel...
As far as libel and slander, my opinion is that you're merely sharing the difficulties you had with your experience. Nothing wrong with that in this free speech country that I'm aware of...