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Any suggestions on where to stay in Lugano?

We are planning a "pre-trip" few days in Lugano before beginning a hiking trip from Balzono. I'm looking for any advice on (1) where to stay in Lugano (not super posh but clean and nice) (2) any great places to get off the train and stop someplace else before continuing on to Bolzano and (3) and whether 1st class rail tickets are a better idea in summer season. All happening in late June. Advice welcome!

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Wow that's a beautiful hotel Carrie. Makes me want to go back to Lugano.