I'd rent a car. If they don't want to do that, they can catch Uber/Lyft to get around.
For Universal, I'd stay right there at the Hilton or the Sheraton. They can walk to the park, but there are shuttles, too. Often, buying Universal tickets online ahead of time saves some money.
Disneyland has lots of places to stay close by. They can stay across the street on Harbor to walk to the parks, or stay about a mile away in Garden Grove at places like Hampton Inn or Homewood Suites. Those types of places usually don't cost a lot and they include a full hot breakfast in the nightly fee. They can take a paid shuttle from those to the parks. If they choose to stay across the street on Harbor or at the Candy Cane Inn, they will be walking distance to lots of places to eat and to the park entrances.
Knotts is a big let down after Disneyland. I'd suggest they visit Knotts before going to Disneyland. Knotts is another park that often has less expensive tickets if purchased online before they go to the park. There's a chicken restaurant there that has a very long reputation of being a good fried chicken meal. I wouldn't stay in a hotel there. It's close enough to Disneyland to drive or to take an Uber/Lyft.