I also wouldn't recommend venturing far out of Tokyo if you only have three days, but for future reference, Atami is a bit of a dump, full of big, moldering concrete hotels. (Fast to get to on the Shinkansen, though, which is a large reason why all those hotels are there.) If you want to overnight at a ryokan, which you should next time around, it's worth going out further down the Izu Peninsula, or head 180 degrees in the other direction and go up to eg. the Nikko/Chuzenji area instead.