I also stayed at the Palacio in January and I liked the charm of the old building (physical keys, very nice central stairway) and very warm hospitality of the staff. However, without having stayed at the EDITION, I think I would go for a more modern hotel. The physical key was a little annoying (although the staff offered to keep the key at the front desk while we went out) and I found the room to be a little smaller than I would like. I also found the open shower to be somewhat weird with water getting out of the shower area, although I'm not sure if this is somehow the norm in Europe?

The Palacio was also a little farther away from the tourist-y stuff we were there for, but it was a great location for sleep compared to the Westin Palace, where I heard a group of people (probably drunk) chatting very clearly outside my window through the early hours of the morning. Not sure if the EDITION might suffer from the same noise problems I had there.