The reason the fares are so absurd is transborder service on the Maple Leaf across the boarder is one of the most expensive Amtrak trains, it doesn't have buckets because of the agreement that governs it since its co-operated. You can though use the train but only from Toronto to New York State to save you money on a long VIA itinerary because having that international segment (on a multi-city ticket) makes your entire itinerary tax free (and adding the Maple Leaf to Niagara Falls, NY actually made my Vancouver-Toronto trip cheeper), it was then cheeper to buy a multi-city Amtrak ticket from Niagara Falls, NY because of quick less than 24 hour stopovers I wanted to make in Buffalo and Syracuse.
Well the only non-overnight option would mean spending 2:15am to 7:15am in Penn Station between the arrival 67 and the departure of Maple Leaf #63 the next morning ($166 in mid February).
The other option I can think of this taking the Lake Shore to any stop between Albany and Buffalo-Depew, spending the night and taking the Lake Shore the next morning-afternoon. Interesting small upstate citys that have stations in the center of town and I assume have hotels within walking distance are Schenectady Utica, and Rochester. The other 4 stations are not pedestrian friendly, this is $113 when I did the multi-city option on Amtrak.com with a Rochester layover. ($166 on the same two dates with a SDY layover).
Probably the cheapest (mostly train) option if you have little luggage and want a public transportation adventure would be to take the Lake Shore Limited to Buffalo-Depew ($60), spend the night and the local Buffalo-Niagara Falls Bus system (NAFTA, a day pass is $4, could be slightly cheeper) can take you all the way from near Depew to the New York side in Niagara Falls, NY of the Rainbow Bridge, walk across (or taxi I suppose) the Rainbow Bridge, and then the GO Transit bus from Niagara Falls, ON to Aldershot (direct connectio another suburban Toronto Station) to the GO Train into Toronto (CAN$16.55 total) from Niagara Falls, ON.
I don't have time to do a full route/schedule markdown, I just know its possible and there buses on both transit routes at least every couple of hours throughout the day.