My favorite hotels are charming, reflective of their environs, comfortable and clean. I also care about good beds and great coffee. If you share any of my preferences, Hotel Rumi Punku is a great choice for staying in Cusco. The rooms are large, and there's a lovely courtyard. The breakfast was the best one I had in Peru--eggs to order, croissants and rolls, cut up fruit, and a variety of whole fruit including many that can be peeled.
The water pressure in the shower was good and there was plenty of hot water. It's about three blocks from the main plaza and quite near the arts district. It is important to note that Cusco is quite hilly, so the three blocks involves walking either up or down an incline.