JR Tower Hotel Nikko Sapporo. I went there last February and it was a really nice hotel. The room we stayed in was really big, so all 4 of us can comfortably stay in the room. It is very convenient as well, right on top of the JR station.
I booked agent, can't remember the rate but it was not outrageous, maybe slightly higher than the cheap ones but the service, the room size and the breakfast are really value for money, especially you have chlidren with you.