You might want to check out Tower Suites in Reykjavik. We haven't been but are going next summer and that is where we will stay in town. I'd love to get feedback before we leave! It's appeal to me is slightly outside what I've heard can be a noisy town at night, but close enough to go in and enjoy it. The rooms look beautiful - all glass atop a tall high rise with gorgeous views. But with the caveat I haven't stayed so just hoping it will be as nice as it looks!