Which Milan Airport ?

Whichever airport your airline chooses.

You have to go to Milan Centrale to get the train to Varenna, so it does not matter which airport .

There are many hotels near the train station that others will recommend. I stayed at the Sheraton about 5 blocks away because I had points to use.

If you are flying directly from the US to Milan, you'll be landing at Malpensa. There is a train to Milano Centrale station from the airport every half hour cost 13 EUR. Milano Centrale is where the trains to Varenna go from.

If you are making a connection elsewhere in Europe on the way to Milan, you may have the option of flying into Linate. There are buses running almost continuously to Milano Centrale costing 1.50 EUR.

Staying at a hotel near Centrale would be my choice. The Berna is very nice, also the Garda and a few others on the same street walking distance from Centrale.

Malpensa, because Linate only serves European destinations.

List of destinations and airlines from Milan Malpensa airport: https://en.wikipedia.org/wiki/Milan%E2%80%93Malpensa_Airport#Airlines_and_destinations
List of destinations and airlines from Milan Linate airport: (a much shorter list): https://en.wikipedia.org/wiki/Linate_Airport#Airlines_and_destinations

mary,

"Suggestion of a hotel to stay at for the first night we are in at the airport?"

Could you clarify this sentence? Are you planning to stay in Milan for one night after you arrive? What time does your flight arrive?

With more details, it would be easier to offer more specific suggestions.

Linate is much closer to the city, however, due to the length of the runway, it cannot accommodate wide body airplanes from North America, so only Intra EU flights on narrow body planes operate from that airport. If you happen to travel on a European airline, Linate is an option to consider.