Lobos Lodge may not look like a european cottage like so many of its neighbors, but I found it to be plenty charming and refreshingly un-pretentious. A private inner courtyard features tidy, eclectic landscaping. Inside, the rooms were large and clean, and just slightly dated and worn, but not to the point of being unattractive. Rather, it feels homey and warm. The location on Ocean is superb, you couldn't have better access to shops and restaurants and of course the ocean.
Our room had a pass-through door to another room and at times we could hear our neighbors a little more than we liked, but luckily this was not an issue. For ultimate quiet, you may want to ask for a more private room if possible. Also, their site seems to indicate that all rooms have single kings or queens, but some rooms have sleeper sofas so this is useful for families, etc.
Carmel has a lot of achingly cute places to stay, and they come with a price to match. If you care a lot about staying somewhere that looks "quaint" and want a full b&b experience, look elsewhere. If location, clean comfort, and value are important to you, look no further than Lobos.