Whether or not you have hotspot capability on a device is 'almost' always a matter of whether it is included in your data plan. It has to be enabled by the carrier. Rooting or jailbreaking to add hotspot ability to a phone or device is a gray area, or at least I'm not sure of it's legal implications. No doubt the vary depending on what country you are in.
At the very least your carrier's EULA (End User License Agreement) probably gives them the write to charge you or terminate service if they catch you at it.
Most carriers in the U.S. now include hotspot ability as part of the standard package, so the question is becoming less of an issue.
As for the original question. It all depends on how often, in what situations, and the level of connivence you desire when using the iPad mobile. If you are going to use it out and about rarely, or when you do you expect to sit down and use it for an extended period of time, the hotspot solution should be fine. If you want to whip the iPad out anytime, anywhere, and start using it immediately, you may soon regret saving money on the cheaper model and several dollars a month to include it in your plan. Or not. Depends on your money vs. convenience threshold.
I tend to go the convenience route. But that's me.
The GPS, which is not in the wi-fi only model, should also be considered. If you think you may use the iPad for any kind of mapping or navigation, it will work much better with the cellular model.
I probably said much the same thing in the link Johanna supplied, but I was feeling chatty.
