Its a quaint hotel, a little out of the way of downtown Nikko but well worth it - if you have a Nikko World Heritage Pass, you can take a bus for free about 300 meters from the entrance. The staff is great, and they have their own outdoor hot spring bath, which gives it a unique charm. The only downside is that the pillows are not very soft, even by Japan standards. Could use a replacement.
Its a bit dated, but for a small town hotel, it should be expected and is part of the local charm.