We went to Yunomine-Onsen in Wakayama prefecture last weekend, by JR trains and bus. Yunomine is not too big town, there are about ten the Japanese style inns, one shop, and public bath in there. It's best place to stay for just relax, and enjoy hot springs.
I like a Yunomine hot springs, however it's pretty far. (We spent six hours traveling in the train and bus)