Kristen,
I've stayed at Albergo Olivedo (also with a lake-side room) and the room wasn't luxurious but was very comfortable. I was travelling solo and with that particular single room there was no WC (the bathroom was down the hall and the shower one floor down). Most of the other rooms that I had a brief look at appeared to have ensuite facilities.
Albergo Olivedo is only a short distance from the lake. The Ferry dock and ticket office is right across the street. The noise from the P.A. system starts in the morning but I didn't find that to be a problem. As you said, people don't often stay in the room that much anyway. The restaurant there seemed to be quite popular not only with those staying in the Hotel, but "walk-ins" also. As I recall, the Ravioli was wonderful! If the weather is nice, the restaurant is outside on the patio and it's wonderful to sit there looking at the lake with a glass of Vino, looking at the lake and watching the boats pass by.
I've never stayed at Albergo Milano but it appears to be a bit more "upscale" (ie: more expensive).
Happy travels!