I am writing this review because there have been a number of inquiries from people looking for lodging in Varenna and because I have not gotten around to finishing my trip report. I hope this might be helpful for someone.
I stayed 3 nights at Fio & Gio guesthouse right in the center of Varenna. It is the first building off the main piazza toward the station. I would stay there again but I realize it would not fit everyone's needs. I booked through Booking.com. It is also on several other booking sites but as a small place it does not have its own direct booking that I could find..
PROS: Convenient location with a wonderful view of the lake from the shared roof terrace. The terrace has tables, chairs, cushions for guests. Wine glasses and a corkscrew are available in a shared kitchenette. My room did not have its own lake view but some rooms might. I paid less than 80 euros per night for a single room in mid-October. Breakfast is handled by a voucher covering a continental breakfas at any of three cafes very close by. I tried all 3 and liked them. There are lockers available for guests who need to check in before their room is ready or leave their bags after checking out. Self check-in was very easy with photos and WhatsApp communication from hosts.
DOWNSIDE: Most rooms have a shared bath. Although not my preference, I didn't mind too much. The bathroom was kept very clean and shared with just one other room. Rooms are on the first (one flight up) or second floor (no elevator). The only staff onsite is the cleaning person for a few hours per day. The hosts are not in Varenna but are very accessible by email and WhatsApp.