Nikko Kanaya hotel was a wonderful stay. It is a historic hotel and one of the first "Western" style hotels in the area, so the rooms are much larger. The carpets are a bit outdated, but everything felt clean. There is no onsen at the Nikko location, but their sister location in Chuzenji has an outdoor onsen that you can use at a reduced price.
NIkko Kanaya is located in a great location to walk to the temples and shrines. There is a hotel shuttle that has limited timings, but was convenient for pick up from the train station, as well as riding back from its other property near Lake Chuzenji, near the hiking area and falls. Otherwise, the local bus would cost 200 Yen from the train station to the hotel, or a 30 minute walk.
Our rooms were very spacious. I didn't like the toiletries and ended up using my own lotion. They had hot water ready for green tea, but no coffee was provided in the room. The breakfast was not buffet style and they only had limited options with eggs, sausage, and toast, but it did fill us up.
Restaurants in town close early, but there was a nice steak house near the hotel for dinner. There is also a nice path behind the hotel to walk down to the river.
There were enough English-speakers at the reception and restaurant so that communication was not an issue. If you are vegetarian, please talk to them the day before so that they can prepare a customized meal for your breakfast (if you get that included).