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Ryokan in Hakone - best location?

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We are planning to spend two nights in Hakone in late September and would like to stay in a traditional (although luxurious!) ryokan.
Are the expensive ones really worth the money and what is the best location to be in for doing the Hakone loop? I'm not sure I want to be too near Hakone-Yumoto station (convenient but not the most scenic location?).

Any tips would be appreciated - arigato- gozaimasu!

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