I have stayed at a hostel and a hotel in Milan, and LOVED the hotel...the hostel got the job done ;-) The hostel would have been better if my room was not facing the street, and it was VERY hot when I was there, with only a ceiling fan. Since it's your 50th, I assume you would like something a little nicer than a hostel (though I stayed in it on my "budget honeymoon")...I stayed at the Hotel Dei Cavalieri with my parents in September of 2005, and it is a wonderful hotel. I don't remember if I had a pullout couch or rollaway bed, but they should be able to accomodate all 4 of you in some way or another. The location is fantastic--it is across the street from a metro stop, and very close to the Duomo (short walking distance). It IS 4 stars, so it can be more expensive, but if it is within your budget it is worth it.
Sadly, I can't help you with Zurich (wish I could!). Hope this helps, and enjoy your trip!