This question was posted months ago but for anyone who happened to find this on google (like I did when I was planning my trip) and is interested in the answer, here is my best shot. I just came back from Japan a few weeks ago.
1) The room was not very worn out...but it had a scent (I think it was a combo of smoke and wood smell...cedar maybe?) There's some disrepair in some parts, but it's quite rustic; I guess you can describe it so. We actually had 2 cockroaches or bugs whatever, in our room, and it was really scary...I think it came in from this opening in the bathroom that wasn't sealed properly...but even with the language barrier, the dude @ the front desk was really helpful and brought us some insecticide.
2) Yes, western style toilet that was in a seperate water closet. The bath was Japanese in that it had a deep tub with a washing area next to it (they provide a wooden bucket and stool)...this whole shower/bath area is seperated from the sink by a door. There is a shower head, so you can either shower in the washing area or in the tub. About the hot spring water...from my understanding through limited Japanese and a lot of guessing at what the sign on the bathroom door said...the water that comes out from the tap IS indeed hot spring water. However, it takes a very long to "heat up". They explain this by saying that b/c the pipes carrying the water (which is supposed to be warm) is cold, so it takes a long time for the pipes to heat up and the water to be delivered warm (since I don't think they boil the water...so if it's at just the right temperature and it's travelling in cold piping...then it comes out quite cold). Even though it's a waste of water, I just leave the tap on while I prepare to shower b/c if you got all ready, you'd be standing there for like 15-20 minutes waiting for it to get warm. Also, the biggest problem w/getting hot spring water is that there is simply NO WATER PRESSURE...at least not in our room anyway. I suggest you to fill up the wooden bucket and rinse w/that b/c the water kind of half dribbles half flows weakly out of the shower head...almost impossible to take a good shower w/that. And if you try to add cold water to up the pressure...it'll be cold.
3) I think you can check out the site to find out the price. http://www.hienkaku.com/index2.html
I think depending on which one you choose, it should be between 2100-5250 yen for one hour...can't remember if that's per person though.
We ended up going to a spa resort called Yunessun.
4) If you get basic dinner, you get maybe...3-4 slices of sashimi...of I don't even know what kind of rice it is. There was grilled fish and eel (unagi) but everything was laid out by the time we got to dinner (and we were only about 5 min late) so it was all cold. There was also a platter w/weird jello like things...some of it tasted ok, others was just weird. It's very traditional Japanese cuisine so if you're only into stuff like sushi, sashimi or like cooked stuff, you probably won't enjoy the basic dinner. I think you can probably upgrade your dinner though to like have tempura and hot stuff...b/c we saw leftovers on other tables. But of course, it'd cost a lot more.
So I guess for anyone who wants to know about Hienkaku...that's all I know. ^_^ Feel free to ask questions at any time and I'll try my best to answer if I see the post.