It is indeed a beautiful city, although if you're coming in on the train, prepare to see massive building works as you leave the station. A large area of '60s-built concrete monstrosities has been knocked down, leaving big piles of rubble. Proper Bath stone buildings will be erected over the next couple of years.
As for hotels, the Bath Hilton is in the centre, about three minutes walk from the Abbey. It's not a fantastic looking hotel but will do the job. Or if you're looking for something cheaper, there are some good B&Bs on the Upper Bristol Road -- eg 'Hotel St Clair' (I stayed there when I moved to Bath!)