It was easy to find my way there from Atami Station. Just walk to the end of the shopping street at Atami Station, & you will find a Shell Station. Take the small downhill road next to the shell Station. Walk about 5min & you will see Wafukan on the right side of the street.
Booked a Japanese Tatami room with a private outdoor onsen. Room was quite big, with toilet & bath/shower separate. Outdoor onsen, however, was next to the street, so be careful not to be undressed.
Dinner was delicious, with many small dishes. Although the lady serving the meal didnt speak English, she made efforts by asking the hotel reception to write down in English what she wanted to express. Very pleasant & friendly people at the hotel.
Hotel location was right in the city. Walk a few minutes & you will see the Moon Terrace & Atami Ginza. Very near to the bus-stop too, if you want to take the Yu-Yu bus, which takes you around the attractions at 800Yen the whole day. You can hop on & off the bus by flagging a pass, which is given when you first pay for the fare. There is a tourguide on the bus too, but he only speaks Japanese.
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