You can be in the middle of things*

..and I'm not just saying that cause I have three airbnb apartments LOL (I can inbox links if interested)

To be in the middle of things you kind of don't want to stay anywhere more north than bloor st. No more east than like jarvis and no more west than Dufferin and as for south..you can stay on (or near) the lakeshore (which is where the parade is and SOME events but I wouldn't recommend it for a first time unless you really want to stay in a condo-style space ..youre just a bit removed for the "real" downtown core.
Those ^^ parameters cover a huge space all transit accessible so you should be able to find something suitable.

Its early yet so most places on airbnb may not even have their "caribana rates" up yet so I would move quick to take advantage.