I strongly suggest Inn at the Market. Lovely hotel at Pike Place Market. The hotel deck has the best view of Seattle Sound anywhere. Convenient to the Northernmost cruise ship dock. Short trip south to the industrial area for all other cruise line docks. From this location you'll enjoy Post Alley as well as the Pike's Market.
The hotel Monoco is very nice as well as the Sheraton downtown. The edge water is a little older but also very nice. I live in Seattle and there are several Boutique style Hotels downtown that are very nice. I think there is one call Hotel "9" that has gotten great reviews. Also, several bed and breakfasts in the area. 8)
Well we ended up staying at the 5-star Olympic Fairmont in downtown. The hotel is old-school, very charming and the service was definitely 5-star from the turndown service to checkout...it was a dream. I will not hesitate staying there again.
The bed was the best, ! You know its good when you don't want to get out the next morning, only to pull back the covers and find out the brand! hehe