Yes, Christmas markets close on the 24th and "everything" will be shut down from noon 24 December through 26 December. The Christmas markets (actually "Advent markets") are wonderful and there are several of them scattered around the city. But definitely plan on hitting them before Christmas eve. The one at the Freiung is our favorite. It's small, gemutlich (and near where we live). Despite the "everything will be closed" comment, hotel restaurants will of course remain open. Therefore, if you splurge on a nice, historic hotel, I'm sure it would still be a nice Christmas. A few years ago we met friends at a nice hotel in Garmisch over Christmas and had a lovely time. We even "special requested" a small christmas tree in our room (for the kids). Kids had a great time decorating it with paper decorations. But I digress. There are many beautiful and historic hotels along the Ring Strasse. Hotel Sacher ( http://www.sacher.com/ ) is the grand dame of Vienna hotels, but is very expensive, but maybe worth a Christmas splurge. But, as I said, there are dozens of charming hotels to choose from. It all depends on your price range. Regarding the fact that everything is closed: there is a lot to be said for wandering around the old city when it is all shut down and quiet. Also, both the Graben and Karntner Strasse have elegant christmas light displays which are really nice. As far as Christmas music goes, during December it seems that almost every church offers special music on one date or another. A quick 2 minute search on the internet found this:
http://www.classictic.com/en/Christmas-Concert-in-Vienna/13074/87107
I'm sure you can find many more. One last bit of caution: Be aware that, in addition to everything closing for those three days, it can be bitterly cold in Vienna at Christmas. Mercury hovering at the freezing mark is not uncommon. And snow is not guarantied (although we've had a few white christmases too.)
