Thank you for all the responses and apologies for the delay in replying. I think I confused people with my request for a hotel with a bit of life, it's a local expression. We stayed in a beautiful hotel in Rome a year ago and while it was beautiful the hotel seemed empty and when we visited the residents bar it was empty. I was looking to book a really good hotel around €200-300 a night so we wanted something really special given that we were only staying for three nights.

From my "dream list" of Venice hotels:

Palazzo Priuli
http://palazzopriuli.hotelinvenice.com