I'll tell you what I know, but keep in mind I know a lot less about area hotels than a frequent visitor from out of town would.
True, the Peppermill is pretty far away from downtown and the university, but it's also the closest to a Vegas-style resort the area offers. It's undergone a lot of expansions and renovations in recent years, and is frequently named one of the best resorts of its kind in the country (including a recent four-diamond rating from AAA). If you're staying here for more than a couple of days and would like to explore more of the region than what a typical weekend trip might include (like maybe Lake Tahoe and Virginia City), its location is more advantageous. The same is true of the Atlantis, which is a little further up Virginia Street. At both places you'll find a great assortment of restaurants that are popular with locals and guests alike.
I'll pose the question on our message board and see what suggestions my colleagues have to offer.