We stayed at the
Mediterranean Inn when we went. Great hotel, good price, and good views. It is near the Space Needle/Key Arena, Experience Music Project. Quick bus ride on the bus (same street as the hotel for the bus route) will take you to Pike's place. There's a Star Bucks at the hotel too, but I recommend Pike's Place for coffee. And, if you're renting a car, they have parking which I think was pretty reasonable as well. Some good restaurant in the area too.
Edit: Forgot to add that you can access the roof of the hotel anytime and there are some amazing views up there. We sat up there at night time after coming home and just enjoyed watching the city. They have chairs and loungers up there to sit in. As well, there is a Safeway right there, in case you want to grab some food/snacks/etc.