Punalu'u is close to sea level, whereas the summit crater (where most of the emissions occur) is more than 4000 feet above sea level. In all of the times that we have been there, Punalu'u has been below the VOC. Now, driving the road to Punalu'u from Kona, I have experienced very severe VOG on the south slopes of Mauna Kea, near Hawai'i Ocean View Estates. I have also see the VOG wrap all of the way around the mountain.
I was in Honolulu in January of last year, and the VOG was quite noticeable there.
We've stayed at Sea Mountain several times, never for more than three nights, because it is the closest timeshare to Volcanoes park. We've also stayed at a B&B in Mountan View, which is halfway between Hilo and Volcano. We thought that was a good location to visit both the park and the Puna Coast.
With all of that being said, if you are open to renting, I would also suggest staying somewhere on the Hilo side of the mountain. First is that unless there is extremely unusual weather, you will be upwind of the volcano. Second is that if you want to view lava flows, there's a good chance that the best viewing area will be accessible from the Puna area, which you can only get to from the Hilo area. Third is that the Puna coast itself is a wonderful place, that doesn't get much tourist traffic (except for lava viewers), and being based out of Hilo makes it easier to get to that area.