I was here in Feburary 2013 and stayed in a traditional Japanese room (Ryokan).
The place was very clean and the experience was fantastic. We had to roll our beds out into the room and put the sheets on but that was all part of the fun and experience. The communal showers and toilets were very clean and we didn't use the communal kitchen area so I can't comment on that. Staff were incredibly helpful, and actually made our holiday better by suggesting places we hadn't heard/considered before around Hiroshima that we really enjoyed. Additionally, we arrived very late at night and after calling the front desk, they made arrangements so we could get in.
I would definitely give friends the details of this hostel if they were to stay in Hiroshima, and would recommend it to anybody.