Directly across from the Xindian MRT station, the busy New California Hotel has 45 clean, modern and compact singles and doubles, although they're decorated a bit like dentist waiting rooms. It's worth it to pay NT$200 extra to get a room facing the lake. The breakfast lounge on the 8th floor also has sweeping views.
You can get directly to the hotel from Taiwan Taoyuan International Airport via airport bus 1968.