Nyuto Onsen for Budget Travellers

I'm a budget traveller. But yet i want to enjoy the beautiful and famous onsens of Nyuto!!

I'm going with another friend, 2 of us altogether. we'll be going in 27 april 2013.

My budget i can spare is around (yen7000/person or less),

Q1) are there any cheap accomodations around/in Nyuto Onsen area? (The best around Tsurunoyu Onsen)

Q2) Any places to stay that is both cheap and nearest from Nyuto Onsen? How do i travel from that place to nyuto? how long does it take? Covered by JRpass?

THANK YOU VERY MUCH!! loves!

Q1) are there any cheap accomodations around/in Nyuto Onsen area? (The best around Tsurunoyu Onsen)

Staying at the honjin of Tsurunoyu costs 9600 yen per person and is worth increasing the budget for a single night. If you like a rustic experience, it's as good as it gets:
http://www.tsurunoyu.com/FONDMENT/t-heya.html

But the rooms are very popular. You will have to reserve early - preferably half a year in advance. The rooms go on sale on the first of the month half a year before your stay.

There are also more regular rooms from 8550 yen per person.

You may want to consult here:
http://www.japaneseguesthouses.com/db/akita/index.htm

Any places to stay that is both cheap and nearest from Nyuto Onsen? How do i travel from that place to nyuto? how long does it take? Covered by JRpass?

The buses to Nyuto Onsen are not covered by the Japan Rail Pass:
http://www.japan-guide.com/e/e3650.html#jump_access

We visited Nyuto Onsen after having left Morioka, rather than staying overnight. You could look at staying there, Kakunodate or Tazawako, then catch the bus from Tazawako station. As Tsurunoyu is harder to access as a day user, we went to Ganiba. The mixed gender outdoor bath was an amazing experience.