The Westin Nagoya Castle would be a front-runner, as it is only a few moats away from the Aichi Prefectural Gymnasium housing the tournament. I haven't stayed there but it got fair reviews on the *wood forum, IIRC.
Hotels I have stayed at are the Marriott, atop the Shinkansen station and quite new, and the Hilton, about 10 minutes by foot/5 by taxi/1 subway stop away from the Shinkansen station. Both are comfortable business-class hotels, with average-for-Japan sized rooms, nothing fancy.
The morning session actually features the lower division bouts. Worth going to especially for those unable to secure 'A' seats, as access to that section is usually restricted with the arrival of the juryo wrestlers around 2-3pm.
I recommend bringing a camera with a good telephoto lens, as my compact 3x zoom didn't quite cut it from the 'B' section at the Kokugikan.