In any other place, I would have given this 4 stars. However, given the shortage of reasonably-priced, top-notch hotels around the lake, my 5-star rating reflects what was available for Taiwan. The room was very nice, and the hotel was close to the bus station and to the start of the trails around the lake. The staff was incredibly friendly and helpful, and made our entire stay around Sun Moon Lake a great experience. Any issues we experienced, such as a slow elevator, narrow stairs, too few electrical outlets, etc., were very minor, and are to be expected throughout Taiwan.
One thing remember: Take your key when you go out. Without it, you won't be able to get back into the hotel after 9:00 as the staff are off.
Ask the staff about the local restaurant serving local mountain vegetable-based dishes. You won't regret it.