That may be the best for you. I have heard of this place, the Hotel Metamorphis, that has suites or apartments and is right near Old Town Sq -- some folks have commented on it here a couple times
http://www.hotelsprague.cz/metamorph...amo_e.php#ceny

However, you can see that it isn't really top level from the photos, even though I think it may be 4* (not to me, anyway, it's a bit ordinary in furnishings). I know they have suites and are moderately priced, but I don't think hae an elevator. I don't know the bedding arrangements for kids (they say something about small children can use the pullout sofa.

I would take a look at Casa Marcello, though, as it is a nice hotel and does have suites and apartments and is reasonably priced
www.casa-marcello.cz

I have stayed twice right across the small square from it (Hastalska) and really like that area. It is within walking distance to Old Town Sq, but is more a quiet neighborhood area than tourist area -- it's in the Jewish Qtr (Josefov section) officially, although not right around the part of that with the sites of attraction for visitors. It's near St Agnes convent. If that would work out, I like that area best myself.