The goal, if I'm not mistaken, behind the convention hotel is two fold.
One; to provide a hotel with 1000+ rooms that has a direct connection
Two; to provide additional convention space for the Salt Palace, while also providing convention space that can be used, seperate from the Salt Palace. So the hotel can host conventions within it's own walls for groups staying at the hotel.
As an example; Lets say the Grand America were directly connected to the Salt Palace (obviously not in it's current location) The Grand America has convention space within its own walls and can host self contained conventions. Being connected to the Salt Palace it could also be an extension of available Salt Palace space.
So yes they sort of do need to be in the same location.
Why not both, a new tower skinny sleek tower for the Radison, maybe 20-25 stories tall, with parking on the first few levels, and a convention hotel on the RWP site?