You are not off base at all. If anything, Starwood is off base. The way I see it, you’re not canceling or changing your reservation, because you still intend to stay at the hotel on some of the days you had originally intended to be there.
The W Hotel, which is owned by Starwood, appears to be interpreting its own rules in a way that is most advantageous to the company.
I’ve reviewed the correspondence between you and Starwood, and the interesting thing is, it knows it was wrong. “The wording of the cancellation policy in two different phrases is a known glitch,” it says in an email to you. “Our Web Team is working as fast as possible to get this corrected.” (This case was resolved several months ago, and the problem is now fixed.)
You took your case to the highest level you could, but were still getting form responses. By the way, I list all the higher-ups on my consumer advocacy site: http://elliott.org/contacts/w-hotels/.
Your next stop would have been a credit card dispute, which is something I recommend only as a last resort. Calling me was the right move.
I contacted Starwood on your behalf. A company representative got in touch with you immediately and suggested that in the future, you reach out to the hotel directly before taking your complaint to corporate. That’s good advice.
The W changed your reservation to the three nights you wanted without a penalty fee.