In your situation I would make alternative arrangements. you should consider the Sofitel if you do go to Hua Hin because it is quite a unique property and it doesn't feel at all like it is in town even though it is (if that makes any sense). I think it is good of the hotel to pre-warn you, I had a situation in Mauritius a couple of years ago where a conference had booked the entire property which led to a disastrous stay (which we cut very short).

I can't comment on the Hyatt or IC having never stayed at either, Hua Hin as a place is nothing terribly special, most properties are spread out around the town South and North and the town itself isn't terribly pretty. Many local people tend to visit Hua Hin as a weekend away from BKK rather than for an extended stay.

I like the Sheraton property and have been meaning to go back because we enjoyed it and things at the property seem to have developed positively since our stay. The suspension of flights from BKK (forcing a dreary road journey which feels much longer than that to Pattaya) put me off however.

There are nicer places in Thailand than Hua Hin that is for sure, the Sheraton Hua Hin is a nice property though. Whether you should seek an alternative in Hua Hin or go elsewhere I guess is down to what you really want to do.