1. We are scared that what if the Uturn is not allowed and we are supposed to stay in a hotel?- You should be ready to stay and quarantine in hotel for 14 days in worst case situation.
2. We will take negative covid tests with us and also we are planning to go after our vacccination, do you think vaccination would help us with allowing an u-turn?- No idea how does vaccination and u turn are interrelated.
3. With our US visa statuses above, will there be any issue when we are coming back?- With your case, people have been able to come back to US. However, please remember that even when you have valid visa stamped in your passport, US Border official have the authority to decline your entry into United States. No one can guarantee entry into US even when you have stamped visas.
4. We are planning to go with a rental car from costco, should that be fine?
Whatever car you can take, it does not matter to Canadian officers as long as you are not entering Canada.
5. I heard peace bridge is better than windsor border, is it true?
Some people may have better experiences elsewhere and it is completely subjective, but I personally believe that rules are same at any border entry point.
All the best.